The stock market is one place that attracts as well as scares investors, especially the first timers. There are two schools of thought when it comes to the market, some believe it will make you rich quickly while others think that you will lose everything in it. In a way, both ideas ring true. How you perform with stocks depends largely on your understanding of how the market works.
This article explains share market basics for beginners to help you learn about it and make informed investment decisions.
Are you wondering, “what is the stock market?”, well, to begin with, it is essential to understand stocks and shares. When you buy the share of a company, you become a part-owner of that business. The share works as a documented proof of ownership that you can sell to others.
There are separate markets where you can buy or sell stocks. The stocks are issued and traded in the share market, where the investors can exchange the ownership documents. There are mainly two such markets in India, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Before you start investing in stocks, it is important to understand the myths about the market. The below list explains the most common misconceptions.
If you want to know how to invest in the share market, you first need to open trading and Dematerialization (Demat) accounts. Nowadays, you can get a trading cum Demat from most brokers and online investment platforms. If you want to become a trader, who buys and sells stocks on the same day, opening a trading account will be enough. If you get a Demat account, you can keep the shares in digital form. You can then buy the stocks for the long term and sell them using the Demat account.
The following are two primary stock exchanges in the country.
Here are some other stock exchanges in India.
To understand stock trading for beginners, you must learn the basic investment terms. The most prevalent ones are as follows:
NSE and BSE have thousands of companies listed under them. But only the top few have the potential to influence the stock exchanges. So, to know which companies are on the top in terms of stock performance, you must check the Nifty and Sensex indexes.
Nifty shows the top 50 stocks listed on the NSE; thus, the market index is known as Nifty 50. And Sensex shows the 30 financially strong companies listed on the BSE. Checking the indexes is the quickest way to determine which shares have the highest potential to earn you profit.
The process of investing in stocks for beginners can be tricky. To help you out, here is a list of things that you must keep in mind before investing.
Are you wondering, “how does the stock market work?” and want to know when to start trading in shares? We have got you covered.
The Indian stock exchanges operate from 9.15 A.M. to 3.30 P.M. They stay closed on Saturdays, Sundays, and during market holidays like Holi, Independence Day, Eid, Republic Day, and other festivals.
Below are some tips for stock market trading for beginners to help you find success.
A key factor for investing in the share market for beginners is choosing the right company. Check out the four tips given below to identify a potentially good company to invest in.
Investing in the stock market for beginners can always be complicated as new investors often do not understand how trading works. However, now that you know how to invest in the stock market, consider the tips provided in this article and proceed with caution. If you keep your fundamentals right, stocks can be a profitable investment option.