Steps for Investing in the Stock Market In India As A Beginner: India is poised for a huge leap from a USD 2.6 trillion economy to a USD 5 trillion economy over the next 4-5 years and this growth will reflect in the stock market in India too in the form of new unimaginable lifetime highs for stocks and indexes.
In case you are planning to start investing in the stock market in India, this is just the right time to start as many businesses are available at discounted prices due to the recent market corrections. Adequate preparation is the key to success in any field of life and that includes the stock market in India. Stock market in India is one of the best investment instruments for wealth creation and has generated higher returns than all other investment options in India like real estate, gold, fixed deposits and bonds etc.
Let’s take a detailed look that the initial steps for investing in the stock market in India:
Step 1: Do your homework before investing in the stock market in India
It is very important to understand how the stock market works and what causes stock prices to rise and fall. There are lot of books available in stock market which can teach you a lot about the stock market. Apart from books, there are plenty of resources available on the internet where you can learn about the stock market in India.
Step 2: Keep your documents ready
PAN card is a mandatory requirement for investing in the stock market in India while Aadhar card can help you in e-KYC (know your client) procedure for instant account opening with a stock broker. In case you don’t have any of these you can apply for the same and keep it ready before opening the account with a stock broker. Besides these two documents, you will also be required to submit a bank statement for last six months along with a cancelled cheque.
Step 3: Signup with a stock broker to start investing in the stock market in India
It is not possible to invest in the stock market in India without an intermediary such as a stock broker. Stock brokers are SEBI registered companies or individuals authorized to trade on the stock exchanges in India. There are two types of brokers in India. Full service brokers and discount brokers. Depending on how frequently you plan to buy and sell stocks you can choose either one of them.
As a first time investor in the stock market in India, it would be advisable to opt for a full service broker initially as they provided a wide variety of services and quick customer service. By signing up with a stock broker, you can open both a trading and demat account. While buying and selling transactions are executed in the trading account, demat account is place where you can hold your shares in electronic format.
To summarize, the above steps can help you started with investing in the stock market in India. Remember to be a successful investor it is very important to invest only in good quality businesses and remain patiently invested.