How to invest in share market-10 Wonderful steps

If you want to learn How to invest in share market first you need to known what is share market.

what is share market ?

The stock market is a dictated platform where buyers and sellers purchase shares of various companies.

Traders can trade on the actual stock market or through an online trading platform. If you trade offline, you must do so through a registered broker. A stock market is also termed a’share market’. Both terms are interchangeable.

India has two stock exchanges.

1.Bombay Stock Exchange(BSE)

2.National Stock Exchange(NSE)

Only publicly traded corporations, or those making an initial public offering (IPO), have shares that can be traded.

1.Bombay Stock Exchange(BSE)

The Bombay Stock Exchange (BSE) is India’s first and largest stock market. It was established in 1875 as the Native Share and Stock Brokers’ Association. The BSE, headquartered in Mumbai, is one of the world’s largest exchanges, with the NYSE, NASDAQ, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange. It lists over 6,000 firms.

The BSE has played an important role in the growth of the Indian capital market by offering an efficient platform for Indian corporations to raise investment money. The BSE is well-known for its electronic trading system, which enables fast and efficient deal execution. The BSE allows investors to trade shares, currencies, debt instruments, derivatives, and mutual funds.

2.National Stock Exchange(NSE)

The full form of NSE is National Stock Exchange; it serves as a marketplace for consumers to purchase and sell equities. While a stockbroker assists you in placing buy and sell orders, the stock exchanges in the background ensure that every buyer finds a compatible seller. The NSE was founded in 1992 as the country’s first electronic stock exchange. NSE, India’s largest stock exchange in terms of equities trading, was the first to introduce a fully automated screen-based electronic trading system. The NSE also introduced internet trading in 2000, allowing anyone with an internet connection to trade and invest in the stock market, regardless of geography.

The NSE stock exchange has 1,920 companies listed, with 1,793 actively traded, including both Indian and Indian subsidiaries of international corporations, and is organized into 13 sectors.

NSE has its own stock market index, Nifty, which tracks the real-time performance of the top businesses listed on NSE.I hope you now understand the concept of NSE. The next section of this article will discuss the role of the NSE in the stock market.

How to invest in share market

If you are interested to invest in share market then you need to learn how to invest in share market.

Follow the given below steps to learn how to invest in share market.

1.Select A Good Brokerage platforms

To invest in stocks, you need a good brokerage platform through which you can invest.

The brokerage platform should be such that it makes investing easy and its brokerage fees should also low.

For example

• Angle one
• Upstox
• Groww

2.Need A Demat Account

After selecting a brokerage platforms you need a demat account complete the required process and fill all the required information.Whith in 24 hours your demat account will got activate.

3.Login Into Your Demat Account

After activation of your demat account login your demat account.

4.Add Funds Into Your Demat Account

Add funds into demat account to start your investment journey.

5.Select Stocks After Proper Research

Before selecting any stock, its fundamental and technical analysis should be done.We should not buy stocks without fundamental and technical analysis.

In investment fundamental analysis plays important role than technical analysis.

Fundamental Analysis

Fundamental analysis is used to determine if a stock is overvalued or undervalued.

The investigation can lead to two types of recommendations: purchase or sell the stock.

When the fundamental analysis of a stock yields a buy recommendation, it indicates that the stock is currently cheap. The stock is offered at a lower price, and the odds of price appreciation in the future are good. The value allows traders and investors to make informed decisions about their investments.

Fundamental analysts feel that the value they calculate after reviewing a company’s financial documents is more accurate than market prices. As a result, they believe that the market will eventually reflect the actual price of the asset.And that is the entire game: identifying opportunities to buy assets at cheaper prices and waiting for the proper time to sell them for a profit.

Key Points Of Fundamentals Analysis

• Understand business model properly
• Evaluate Financial Statements
• Calculate Financial Ratios
• Analyze Growth Potential
• Evaluate the Company’s advantages over competitors

6.DecideYour Investment Amount

Before investing in any particular stock, decide how much amount you want to invest in it,or how many shares you want to buy.

For example –

You want to buy shares of ABC company of 10000 rupees. Price of one share is 100 rupees so here wan can buy 100 shares of ABC company. Total invested amount is 10000 rupees.

7.Diversify Your Investment

We should never invest our entire fund in a single stock. We should invest in different stocks and different sectors which diversifies our investment. Because if we invest our entire fund in a single stock and if that stock loses, our invested amount will also lose. If our investment is diversified, then our loss will be reduced and the risk of sinking the invested amount will be reduced.

8.Keep Tracking Your Investment

We have to keep tracking our investments so that we get information whether our investment is in profit or loss.If we are losing money, should we sell the shares or should we continue to hold them and for how long.

9.Start With Small Amount

Start investing with small amounts and gradually increase the investment amount.

10.Keep Patience

If you are a share market investor and you think that you will become rich overnight then it is crazy to think like this. It takes time to get returns in the share market, for which you will have to keep patience.

Advantages of Investment in stock market

There are many benefits of investment in stock market.

Liquidity

Stocks are commonly referred to as liquid assets since they may be easily converted into cash by a large number of buyers at any given time.

However, finding a buyer for some assets, such as property, is more difficult than for others. However, it is significantly easier to trade equities because the average daily volume of transactions on the NSE and BSE is high. It indicates that multiple buyers and sellers are interested in the same stock.

High Return

The most significant advantage of investing in stocks is that they have the ability to generate huge returns in a short period of time when compared to other investment avenues such as bank fixed deposits.

Protected By SEBI

The Indian stock market is controlled by the Stock Exchange Board of India (SEBI). The Security Board Exchange of India (SEBI) is primarily responsible for regulating stock exchanges, their activities, and most importantly, defending the rights of all investors.

When an investor invests in various financial products on the stock market, their interests are protected by the regulatory framework established by SEBI. This assists them in lowering the risks of various fraudulent acts by businesses.

Diversification

Investors who invest their hard-earned money in numerous sorts of investments benefit greatly from stock market investments since they provide diversity. Stock market investments change in value independently of bonds and real estate. Holding equities for a longer period of time allows an investor to foresee losses on other investment items.

Adding stocks to their portfolio increases risk while delivering significant and rapid gains, allowing investors to avoid overly conservative investment techniques.

Dividend

Dividends are rewards that a firm offers to its investors. In simple terms, it is a supplemental revenue source for investors that every firm pays out on a yearly basis. Dividend payments will be made regardless of whether the stock has lost value or is generating profit.

Disadvantaged of investment in stock market

There are also some disadvantage of investment in stock market.

Risk

The greatest risk when investing in stocks is that you may lose your capital because of the overall performance of the stock market in relation to price changes and volatility.

High Volatility

The stock market is known for its unpredictability. Prices can change quickly, affected by a variety of reasons such as economic events, firm performance, and global crises.

This volatility can be unsettling for investors, particularly those with a limited risk tolerance. Sudden market downturns can result in severe portfolio losses, so carefully consider your risk tolerance before investing in stocks.