Many people want to invest in the stock market, but due to the technicalities and risks of this market, they shy away from investing here. If you too are thinking of starting investing in the stock market, but don’t know whom to ask, we will tell you about it in very simple words.
Decide strategy first
Before making any investment you need to know why you want to invest. Knowing how to achieve your financial goals is one of the most important things. You don’t have to be an expert to do this. You only need to know a few basics. Make one plan and the other have enough discipline to follow it.
Why do you want to invest
Now you have to decide what is your investment goal. Are you investing for a wedding, your childrens education fund or your retirement. After that decide in how many years you have to complete your goal. This is because when you invest, the most important thing for you to know is when to enter and when to exit.
Open Demat and Trading Accounts
You need demat and trading accounts to start investing. You can start it in these three easy steps. Step 1: Choose a stockbroker where demat and trading account can be opened. Step 2: Complete the KYC norms. Step 3: Once the KYC verification process is completed, you are registered to earn from the market. Click here to open your free demat trading account.
Set a budget for investment now
Setting a budget is an important part of investing. Also, analyze whether investing yearly lumpsum would be favorable for you or more attractive on a monthly basis.
Spot trading and derivatives trading
The easiest way to invest in stock market is to buy the stock of a company. When you buy shares of a company, you can take advantage of capital gains when their price increases. Whereas derivatives are a kind of financial contract. These can be in stocks, commodities, currencies etc. With this method, the parties agree to settle the contract at a future date and make a profit by betting on the future value of the underlying asset.