A Beginner’s Guide To Investing In The Indian Stock Market

1. A BEGINNER’S GUIDE TO INVESTING IN THE INDIAN STOCK MARKET For a complete beginner, the stock market can be an incomprehensible maze of confusing terminology and lengthy procedures. However, just like a toddler navigates through his/her surroundings and is gradually able to make sense of the world, a budding investor in stocks also eventually becomes accustomed to the world of equities. Are you a beginner looking to start your journey with investment in stocks in India? Then read on, as we bring to you some guidelines you can follow to ensure a hassle-free stock investment! 1.Prerequisites for your stock investment journey The most basic prerequisites to start investing in stocks in India are your PAN card and demat account. Your PAN or Permanent Account Number is a unique 10-digit code assigned to you for tax purposes. A demat account is an electronic repository of all the stocks you own from different sources. This can help you maintain a systematic record of all stocks held by you, and is mandatory for every investor in India. 2.Finding the right stock broker or depository participant After having set up your PAN card and demat account, you could get in touch with a depository participant, a brokerage firm or an independent broker and seek guidance in proceeding with purchasing your stock. Speak to your stock broker about which stocks may be beneficial for you to invest in, given your goals and expected returns. You could also research in-depth about the various options available to you in terms of stocks to buy; as well as a more general analysis on the latest stock market trends in India. You may also want to opt for a mutual funds investment – choosing either to invest in multiple stocks or a blend of stocks and other securities. 3.Investing at the right place and time

2. The stock market can seem like a dicey place full of unpredictable outcomes. But really, it’s all about understanding which investments may yield the best returns and waiting for the right time before striking. As a beginner, it’s best to start with buying shares from a company that is ready to offer the same at the least price. However, there are a number of companies out there that may offer stocks to buy at prices within your budget – what matters is their commitment towards growing as a company and overall transparency in the dealing. A transparent company provides all the necessary information to you and your broker and is dedicated to “putting its money where its mouth is”. Also, make an effort to understand the products or services the firm deals with and how its business works. An ideal company’s business processes should be easy to understand, and its objectives and aims realistic in nature. You could consider focusing on those companies that belong to a domain you can easily understand – for instance, if you have considerable knowledge of the technology domain, you may want to consider buying shares from a tech company. Based on your research and analysis, finalize where and when you would want to invest in stock and at what amount. 4.Reaping the Benefits! Once you have decided on which shares to purchase, leave it to your broker or stock brokerage firm to network with the seller. Once you pay the broker the amount for the shares, your broker transfers this amount to the stock exchange. From here, the amount is paid to the broker of the selling party and finally the seller, who transfers your shares to your broker. If you are somewhat sceptical about investing all your money in one place, you could go for a mutual funds investment – by buying equity shares from different companies in order to balance out the risks involved in stock investments. When carried out in the right manner and with some caution exercised, investment in stocks can yield significant returns over time. A lot of financial tycoons have witnessed their investment amounts being returned to them at triple or four times the amount invested.