Are you one of those people who want to know how to start investing in the stock market or how to become an investor in the share market? Well, here is the answer to this question in the most simplified way.
Continue your reading to learn how to become an investor in the share market!
Follow the steps below to know how to join share market in India.
How to Become an Investor in Share Market?
To become an investor in the share market, you must
- Be a citizen of India.
- Be 18 years old or above to have an active regular demat account.
- Below 18 years you can open a minor demat account in the stock market.
- Have Aadhar card and PAN card linked with each other
- Active mobile number registered with Aadhar Card.
- Have an active bank account.
Once you meet the above eligibility criteria, here are the steps of how to start investing in the share market.
1- Choose the Stockbroker
There are two different classes of stockbrokers: Full Service and Discount. The former offers the complete package of services (trading app, research, advisory, and PMS) on the other hand the discount broker only provides the trading app to its clients.
Depending upon your requirements and trading experience, choose the stockbroker.
Also, you can check the client base and complaint percentage of brokers to get an idea of its services.
2- Open a Demat Account
After choosing the stockbroker, you have to open a Demat account by submitting few documents like:
- Identity proof (such as – Aadhaar card, Driving Licence or passport, etc.
- Pan card
- Passport size photo
- Signature on white paper
- Address proof (such as – Ration card, voter ID card, Aadhaar card or bank passbook)
- Bank proof (such as a copy of your bank passbook or a copy of a canceled cheque)
- Income proof (such as salary slips for the last 3 months, net worth certificate, ITR statement, or bank statement of 6 months)
Fill in the basic details and other essential information and complete the process by fulfilling the step of e-sign and In-person verification.
3- Download the Trading App
Once your demat account is opened, you have to download the trading app of your stockbroker to place the buy and sell orders from your mobile phone without leaving the comfort of your home.
You can download the app from Play Store or App store (if available).
4 – Transfer Funds to the Trading Account
This step is an important step, most people do not know how to transfer funds to the trading accounts.
Once you have downloaded the trading app, you need to transfer the number of funds you want to invest from your bank account, which is linked with your trading account.
5 – Analyze the Market
Start trading or investing by gaining an overview of the market by analyzing the current trend of the market. For this, you can refer to the data of Nifty and Sensex.
For further industrial and stock analysis, consider market news and other advanced research.
6 – Choose Stocks
The next step in the process to become an investor in the share market is to choose stocks.
Post the market analysis, you have to choose quality stocks that are the most suitable according to your financial goal, investing style, and risk appetite.
It is advisable for beginners to start with small stocks with low risk.
Add stocks to your watchlist and do an in-depth analysis to build a strong portfolio.
7 – Do Fundamental Analysis
Once you have selected stocks, you have to analyze their potential, current market price, historical performance, profit, revenue, and debts of the company.
Also, to get in-depth detail, check the fundamental ratios offering you the information on the current financial status of the company.
8 – Start Investing
Finally, you are all set to start investing and become an investor in the share market. Post fundamental analysis, click on ‘buy’, enter the number of shares you want and your preferred price, then place your order.
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