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How To Invest In The Share Market In India?

The stock market is an attractive platform for retail investors as every person looks for greater opportunities to capitalise on with a small amount of money. No doubt, the stock market offers you such opportunities. An investment in the share market based on informed decisions can provide good returns, provided you are a patient investor.

Trading is different from investing in the share market. Investing requires the allocation of funds for a long time. It is a process of fund accumulation over a long period. Investing requires you to strengthen your basic share market fundamentals. When talking about trading, it requires determining opportunities with short-term profit. Traders sell their securities at a higher price than purchase within a short span of time.

Direct investment in the shares of the companies

In the share market, you can make direct investments in the securities of different companies. It can be traded equities on stock exchanges, IPO (Initial Public Offer) and FPO (Follow-On Public Offer). When you buy shares, you own a part of the company and become a shareholder. Individual stocks can churn out spectacular gains for long-term investors.

To grab any opportunities in the share market, you need your online trading account and demat account with a stockbroker. Here are easy steps elaborating how to open demat account online.’

  • Select a stockbroker registered with the Securities Exchange Board of India (SEBI). You can select a reputed discount broker to save on demat and trading account charges.
  • Access online demat account opening form. You can open an online trading account with the same application form.
  • Enter your PAN details and basic details like name and mobile number.
  • Authenticate the process with an OTP sent by the broker on your mobile number.
  • Select your brokerage plan like a basic or professional trading plan based on your requirements.
  • Upload your scanned KYC documents – ID proof and address proof with your e-sign and passport size photographs.
  • Upload a short recorded video for self-declaration.

Your stockbroker will verify your documents and details. After successful verification, you will quickly get your Demat and trading account login credentials.

Based on thorough research for fundamentally strong companies, share market investing can prove to be an ideal wealth creation opportunity. Equity investments can generate inflation-beating returns over the years, say 7-10 years. However, the share market nature is volatile, and even bluechip stocks of fundamentally strong companies have some volatility, but they can pass by such phases without huge adverse impacts.

Rules to follow for share market investments

  • Invest spare funds 

If you are considering share market investments for the long term, make sure you utilise the spare funds you need in the near term. Another aspect is regarding borrowed funds. Using borrowed funds in the share market, especially if you are taking a short-term position, is always risky as you deal in a share market that fluctuates every moment. You should not bet on borrowed funds to avoid being financially burdened.

  • Define your financial goals

You can quickly determine the suitability of an investment in the share market with predefined financial goals. For example, penny stocks that have the potential to become multibagger may work for long term investors but not for short-term traders.

  • Have an investment plan

Your every activity in the stock market should be planned and strategized. Planned trades can go well for investors as they need to be disciplined. There is no place for emotions. It would help if you learned to be negligent towards short-term market fluctuations to ensure a strategically disciplined trade and avoid losses. Similarly, a short-term trader needs to avoid the greed of more profits that can turn your profits into losses.

This is the way you can capitalize on share market opportunities. Make sure you diversify your portfolio across sectors and companies. Single stock or sector-focused portfolio is always risky during high volatility in the share market. Therefore, it is inevitable to have a well-diversified portfolio. It will help your investment to absorb market shocks.



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