- How can I invest in the share market?
- How to invest money in the share market?
- How to invest in the share market online?
These are the questions to which you are looking for the answer to then you have landed the right place.
This is the right question. Many people just after listening word ‘Share Market’ in front of him, make faces about loss and only the loss.
But you know why this happens due to a lack of knowledge of Share Market Today.
So we have brought a detailed guide of How To Invest In Share Market with 3 Do’s and Don’ts. The share market is good if you invest it in Wisley, and if you don’t invest in the live share market, then the problem indeed gets happen.
We will discuss today:
- What is Share Market?
- What are stocks in the Share Market?
- How to choose and select Stocks to Invest in carefully?
- How to Invest In Share Market?
- 3 Do’s and Don’ts
What is Share Market or Securities Markets?
Share Market is the biggest stock exchange to hold and trade live. A market in India anywhere else where Company Shares or Stocks are publicly issued and sold is known as a Share Market A stock (also known as equity) is a security that describes the ownership of a corporation or any company.
What are stocks in the Share Market?
The Stock Market enables buyers and sellers both to bargain prices and makes trades accordingly. In India, SEBI is the exchange where the stock exchange is done for buyers and sellers.
Classification of Stocks
Classification based on market capitalization
- Large-Cap Stocks
- Mid Cap Stocks
- Small-Cap Stocks
Classification based on ownership
- Preferred & common stocks
- Hybrid Stocks
- Stocks with embedded derivative options
Classification based on dividend payment
- Growth Stocks
- Income Stocks
Classification based on fundamentals
- Overvalued Shares
- Undervalued Shares
Classification based on Risk
- Beta Stocks
- Blue Chip Stocks
Classification based on price trends
- Defensive Stocks
- Cyclical Stocks
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How to Choose and select Stocks to Invest in carefully?
You should always keep the below points on your mind before Invest Stocks Carefully:
- You should always keep a check on company strength relative to its companions.
- Always look for a debt-to-equity ratio in line with business norms.
- It would help if you considered the Price-earnings ratio or PE value ratio can help provide market value.
- You always keep an answer to this question – How is a company operating its dividends?
- Always take an eye on the Effectiveness of organizational management.
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How to Invest In Share Market?
Investing in the share market is not a difficult task. If you keep an eye on the above points then you will be a great investor in the upcoming years.
But How to invest in the Share Market easily and wisely. let’s discuss below:
Step 1. Open Demat Account
First, open a Demat Account with a popular Broker, i.e. Upstox, Zerodha, Paytm Money. Every broker thave special charges and some open your free account free of cost. It is the first preference as the stock or securities you will purchase will be kept here.
Step 2. Do Online Deep Research
Do online deep research about stocks either of Large Cap, Mid Cap or Small Cap. In Starting stage, I will recommend you to go with Large Cap Stocks As these are very risk-free and have low volatility. Follow Money Control for daily Stock market NEWS.
Step 3. Select Stock and Check Company Fundamentals
If you have done deep research now, it’s time to select stock and wait for the store to be correct or wait for it to be low from trading value. If you see some correction in value, Buy that stock immediately.
Step 4. Keep Hold for Long Term
Now always keep one thing in your mind if you have selected any stocks for the long term, then don’t sell that stock in a short time; if you trade that store in the short span of you never earn money or make it in the short term and will end up just after making some penny amount.
Key Takeaways for Stocks
- Always commit to a specific timeline.
- Always give your money time to grow and compound.
- Manage your risk threshold.
- Always pick the types of investments/stock that match it.
3 Do’s and Don’ts While Investing
Suppose you are going to enter in Share market. Then it would be best if you always took care of investment in the right direction instead of listening to other time wastage advice.
So what are the precautions while investing your earned hard money?
Let’s Discuss below:
1. Invest in Blue Chips Stocks: Blue Chip companies or Stocks refer to shares of companies with large market capitalization, i.e. Blue chip Companies. These companies have relatively less sensitive to market fluctuations as compared to Mid Cap and Small Cap companies.
Here is a list of the top 16 blue-chip stocks or Blue chips companies that are faring well in the stock market:
- Indian Tobacco Company (ITC) Limited
- Dabur India
- Hindustan Unilever Limited (HUL)
- Hero Moto Corp
- Hindustan Zinc
- Reliance Industries
- Tata Consultancy Services (TCS)
- Oil and Natural Gas Corporation (ONGC)
- Maruti Suzuki India
- Housing Development Finance Corporation (HDFC)
- Axis Bank
- Eicher Motors
- Sun Pharmaceuticals Industries Limited
- State Bank of India (SBI)
2. Invest in Mutual Funds: You should always invest your hard money in a Mutual fund if you do have not enough time to watch the stock market daily. Mutual funds returns are very high in the ratio in some companies.
3. Invest in Index Funds: You can consider investing your hard-earned money in Index funds instead of any medium for higher returns.
- Penny Stocks: Penny stocks are good to invest in as they can grow and give you higher returns shortly. But every penny stock will rise. It is not predictable. So never trust any advisor or any YouTube have not any good fundamentals research of any companies.
- FD: FD or Fixed Deposits are another way to invest money. FD’s are good, but the return is not good. They have fixed returns over the period. So instead of considering FD, you can look for alternatives like the stock market or Mutual funds for better returns.
- ULIPS: ULIPS or Unit Linked Insurance Plan is a multi-faceted life insurance product which many companies offer. A ULIP plan mainly a combination of life insurance and investment both. ULIPs requires making regular premium payments, and part of which is utilize to provide life insurance coverage. You can only maximize your savings through long term investment. You should avoid ULIPS if you require high returns shortly.
FAQ – Frequently Asked Questions
Can I invest 500 or 1000 rupees in the share market?
Ans. There is not any reasonable diversification to start with Rs.500 But you can start with SIP with just Rs.500 or Rs.1000
How can I buy a share?
Ans. You can follow the below steps for buying a share:
1. Open a Demat and trading account.
2. Link it with Bank Account.
3. Log in to your trading account.
4. Choose the share that you love and want to buy or sell.
5. Ensure that you have funds in your account or load your wallet account with the fund for buying.
6. Shares in your Demat account before selling.
How do Indians multiply money?
Ans. Tax-free Bonds, Kisan Vikas Patra (KVP), Corporate Deposits/Non-Convertible Debentures (NCD), National Savings Certificates, Bank Fixed Deposits, Public Provident Fund (PPF), Mutual Funds (MFs) and
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Summary: How To Invest In Share Market
The stock market is golden in terms of return; you should always invest in it thoughtfully. Your small mistake can drown all your money, so always choose the company carefully and disguise the blue-chip company.
Today we learned How To Invest In the Share Market, but we never advise you to invest in the share market. That is your sole responsibility to choose the share market and invest your money.
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