Stockinvesting and share trading is a business that people consider to be high-risk and highly complicated. They feel that it is not at all easy. But, stock investing can be pretty easy if you understand its process.
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Today’s article is all about stockinvesting for the beginner’s education so that one can easily invest in stock and make money. Follow this beginner's stock investing guide and prepare yourself to make money from money.
What is Stock Investing?
Before to know what is stock investing you have to understand the stock. A stock is a general word used to define any company's ownership certificates. On the other hand, a share refers to a particular company's stock certificate. Holding the share of a specific company makes you a shareholder and the process is overall known as stock investing.
The main things that need before stockinvesting
Before entering the stock market you must have the four main things, without it stock investing is not possible anymore. You must have an identity proof, a PAN card, a bank account, and a DEMAT account. Let me discuss one by one.
1. Identity proof: You must have to prove your identity in the stock market. According to the Government and the regulatory body, this is the first step to enter the share market. If you are residing in India you may have Aadhaar Card, Voter ID Card, Passport or any other proof of valid government identity card.
2. PAN Card: The second more important thing is a PAN card. PAN or permanent account number is issued by the tax department. In India, if you haven’t a PAN card you can apply online at the NSDL site or the website called UTITSL. For this, proof of identity, address proof, date of birth certificate is needed and about 100 rupees fees have to pay also.
3. Bank account: Bank account is also an important instrument. If you have not, try to open an account with any nationalized bank.
4. DEMAT account: For trading or investing in the stock market, the DEMAT account must be opened. For a DEMAT account apply online to NSDL or CDSL or tell your share broker to do it for you.
5. Choose a Share Broker: And finally, you have to choose a share broker for opening a trading account. Almost every nationalized bank providing brokerage facilities or you can choose a registered share broker and open a trading account with it.
Usually, there is a slight difference between a trading account and a DEMAT account. The trading account is where you place offers for buying or selling orders to transact stocks while the DEMAT account is for keeping what you have purchased.
To open and run your trading account, you will first have to finish KYC processes requiring evidence of identity, proof of address and PAN card number.
Things to remember before choosing a stockbroker
There is a number of brokerage firm registered in the market. Thus you have to option of choosing the best brokerage firm to deal with. Some brokers provide trading advice or research report while some do not. Brokering charges may differ from one to another. The trading software will differ. And, maybe, some broker will provide a limited option for trading. So, my recommendation is carefully to check and verify the share broker and choose that which is more suitable for you.
If you opened the trading account with your broker then get your login id, password and start trading. Track your account activity regularly. For risk management try to gain expertise and make a diversified portfolio. Also, invest for a long period of time for better returns.
Please note that we are not giving you any investment advice here. This article is for your initial stock investment education. Since stock investment is highly risky, you should take decisions based on your discretion and loss tolerance.
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