It is the fast-moving digital era where technology controls everything. The stock market is not an exception. The online trading system attracts more retail investors. Like me, many individuals choose share market investments for the high returns potential. But it cannot be overlooked that the stock market is risky due to its highly volatile nature.
I opened my Demat Account with a discount broker and started trading in 2019 without much knowledge. I have been investing since then and learning.
What is a Demat Account: A Demat is the online repository that stores your financial assets electronically. It is the main account to start investing in the stock market.
My Demat Account with a discount broker made the investing process easy and quick.
Experience and Learnings with Share Market:
I understood that little knowledge is dangerous, and the stock market requires market familiarity, patience, and enough knowledge. You can make money with prudent stock picks. There is no scope for individuals blindly making buy and sell transactions and taking huge risks opposite their risk profile. I did not have technical knowledge. With passing time, I started to understand the candle chart. I had to gaze at a few picked stocks for hours to place an informed trade with the entry and exit points.
I have gone through many bad as well as good trades. Here is what every individual, as an investor, should learn about the share market before investing their funds:
- Fundamental Analysis:
Based on thorough research for fundamentally strong companies, share market investing can prove to be an ideal wealth creation opportunity. An investor should know what Market Cap is, earning per share (EPS), price to equity ratio (P/E ratio), Dividend, Book Value, Face Value and other important terms and their significance before investing. It will help you understand the financial statements of the company while shortlisting stocks to invest in.
- Start Small:
You may ask how much money is required to start investing in the stock market. It simply depends on which type of stocks you have chosen to invest in. However, Demat Account India allow you to buy or sell even one share.
- Know What Kind of Investor You Are:
Before investing, find out answers to – what kind of investor you are, what financial goals you want to achieve, and how much risk you can take. Answers to these questions will help you in investing and finding the right stockbroker.
- Do not make haste to buy or sell during a market correction:
Do not think that you have missed the bull run if you do not buy or sell a particular stock today or tomorrow. Stock investing does not work this way. You can find plenty of opportunities from time to time to buy a particular stock. Similarly, if a stock goes down, it does not mean you will sell them immediately. You should focus on your long-term analysis and financial objectives with reading current news.
- Consider Long-term Investments:
The best bet by experts is to stick with stock market basics. Choose a company with strong fundamentals with potential for long-term growth and invest in its stocks with the perspective of long-term profits. Equity investments have the potential to offer inflation-beating returns over 4-5 years. However, the stock market is volatile. Even fundamentally strong companies get impacted by some volatility, but they have the strength to pass by such phases without substantial adverse effects. Therefore, you should consider long-term investments. Make sure you utilize the spare funds you need not in the near term.
- Have a diversified portfolio:
A diversified investment portfolio is an ideal investment strategy for each investor. It is never recommended to invest all your funds in a single stock. Always part your funds into various investments. In case a particular stock goes down at a point in time, another one from another industry can pick up your portfolio. You should check in on your stock investments to identify their growth rate.
Thus, you should reconsider your investment portfolio at least two to three times a year to ensure that you are still in sync with your investment objectives. Open Demat Account Online and start your investing journey prudently.