How beginers can start investing ? ~ stock market

1. If there any Minimum Investment required?

The answer is that you can start with any amount you want. It's simply says that if you want to buy even just one stock you can buy it. Personally, I started with an amount of rupees 5000 but anything between rupees 1000 to rupees 10000 is good to start and the best thing here is that the smaller the amount the better it is for you.

I mean the risk of losing money is highest for the beginners. Generally many people don't know where to invest their money, what stocks can be profitable for them or which is a good industry and that's why they can lose a lot of money. If they start investing lots of their money in their starting days so my suggestion would be to start your investing with a small amount.

2. How and where to open Demat & Trading account?

You cannot go directly to a BSE and NSE and give money there and ask them to give you stock. You have to compulsory joint with any stockbrokers to buy shares for your own. Nowadays the stockbrokers have made the life of all the people a lot easier. I mean just by a single click you can buy stocks of any company. There are a lot of options on our level in the Indian stock market. Few of the major stock brokers in India are ICICI direct, HDFC securities, Kotaksecurities. There are also some discount brokers available in the Indian Stock market like Upstox, Zerodha, 5paisa.com, Angel Broking.

Now in India there are two kinds of stockbrokers.

1. Full service provide broker:

First is full-service brokers these are like traditional banks or big brokers, for example, ICICI Direct, SBI smart, HDFC securities. So these brokers are coming up with the trading facility they also provide you advisory services what kind of stocks you have to peek. Let's say you do not have much information about the Indian stock market and you do not know where to invest so these brokers will also provide you advisory services and along with advisory.

These full-service brokers also provide you other facilities to invest in different investment options like mutual funds IPOs, FDs, currency, Forex, etc. However the charge a higher brokerage which may be equal to 0.5 to 0.6 percent of your total transaction charge. So assume that you are buying stocks of 1000 rupees then here you might have to give maximum 5 or 6 rupees of brokerage and similarly as you raise your investment the brokers' amount will also raise. It is a percentage of the total transaction on the other hand.

2. Discount broker:

The second type of brokers which is called discount brokers they offer a flat brokerage charge. Assume that rupees 10 per every order or rupees 20 per order. Now whether you buy stocks for rupees 5000 or 50000 the brokerage charges are flat rupees 20. I also noticed that when my friend start investing with Kotak securities he was paying a lot of brokerages I mean this brokerage charge you have to pay on both sides of the transaction when you are buying the stocks and when you are selling the stocks so if you bought the stocks worth rupees 5000 on Kotak securities you have to pay rupees 24.5 when you buy that stock.

Let's assume that after one month you are selling that stock so again you will be selling rupees 5000 and you have to pay again rupees 24.5 and overall it turns out to be rupees 49 as a brokerage charge on the other hand when I was using a discount broker like Upstox though they do not charge anything for delivery trading it is free and for intraday, they charge rupees 20 per order.

So, overall I was saving a lot of money when in comparison to Kotak securities. If you are beginner Upstox, Zerodha, 5paisa.com is a good alternative for you, and anyhow do not spend so much money.

Many people who spend like 2-3-4 months just to find out the right broker for their money and they just procrastinate and instead of procrastinating for finding a good broker. If you have used that 3-4 months to learn and to research stock it can be more profitable for you. Now using most of the discount brokers right now you can open your account within an hour I mean 3-4 years ago account opening for trading it generally took around five to seven days to send all your documents and to open trading and Demat account but right now everything is paperless just have to upload your documents like Adhaar-card, pan-card, and bank passbook online on these portal and you can start trading within one day.

3. In which company you should start you investment ?

Now, this is a very important question the base template for the beginners is to start investing in the large-cap company personally I also started with large-cap companies for a few of my first investment where SBI, Wipro, L&T.

So the large companies are easily avaialable as compare to small company. You already something know about them or you can easily find their products and services and similarly, all the financial information or the information about their management their CEOs, who are the promoters all these information are easily available for the large-cap companies but when it comes to small and mid-cap companies these companies are not that easily visible.

If you want to read about the balance sheet or about who is running the company what are the credentials of the managers or the CEO of the company it might take you a lot of time. I read most of the other experience people they know about different websites which we can refer to get all these information but for the beginners, it can be a little difficult so i will suggest you to go for a large-cap company which is easily available and whose product services management competitive analysis all the details you can easily find on google.

So, I'll start with a large-cap company search about them researching about large-cap companies is not that difficult if you just google about any company let's say Reliance industries. You can easily get all the necessary information about them online by typing it name on google. Now once you have understood the basics let me give you a few more advice next is that you should invest in your education.

Lot of people who invest thousand or lakhs of money in a college education or giving semester fee but when it comes to doing courses on personal or financial education or even self-development most people are not refer to invest but the thing is that if you do not invest you won't get any returns and it is very important to invest in your education. My personal suggestion would be to buy some good books on investing.

So, you must buy some books read them and if possible also try out some good courses or the Indian stock market, so that you can make a good pace and the final advice is that increase your investment amount with time. I mean when you start 1,000 to 5,000 is a good amount of use. First few months just as education and gradually increase your investment amount you can move from 5,000 to 10,000 to 20,000 in gradual steps once you have more confidence more knowledge and once you have a better grip on the Indian stock market.

These are most common steps that can help beginners in starting their investing in the Indian stock market. You do not need a big amount to start investing in the Indian stock market similarly open a Demat and trading account is not a big deal. Within one or two hours you can also open your trading and Demat account if all your documents are ready and third is researching stocks is also not difficult if you start with large-cap companies.

Thank you.

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