Home / Markets / Stock Markets /  How to invest in stock market

NEW DELHI : Investing in equities is one of the best ways to stay ahead of inflation in the long term. But the high returns carry their own set of risks. So, never jump into equity investing only for the greed of good returns. It is imperative for investors to understand the risks before making their debut in the stock market. If you believe you understand the dynamics of equity investing and have the required risk appetite, here’s how to go about investing.

We will start with some prerequisites to invest in shares.

Open a demat account: Opening a demat account is a simple process. You will need your Pan card, savings bank account, Aadhaar card and a personalied cheque. You can either apply online through NSDL, CDSL or ask your broker to do it for you. A demat account is needed to hold shares in a dematerialised or non-physical form.

Find a broker: You need a broker to buy and sell shares in the stock market. A broker is an individual or an entity registered with Sebi, the stock market regulator. Choose a broker after comparing the brokerage plans and services offered by different brokers. Go for a brokerage plan as per your investment needs.

Brokerage is the fee or commission charged by the broker.

Once you are through, you can begin to invest. Here are a few worthy points to make your stock buying experience lush.

  • Define your goal of investing in the share market. Retail investors are usually asked to stay away from trading of shares on a daily basis. Know your reason to invest in shares.
  • Keep a track of your shares. Unlike mutual funds, most of the shares will have an exit time. If you miss to exit, your stock might end up in losses.
  • Timing the entry into a stock is also as important as to time the exit.
  • Be updated with all the news about your stocks. One negative news can pull the prices down.
  • Do not follow herd mentality. Never buy a share just because your friend has bought or because you received a tip on a whatsapp group. Do your research.
  • Once you have laid down your goal of investing in the stock market and have acquired basic understanding, you can go ahead and buy shares across industries to ensure proper diversification of your portfolio.

It is always better to take help of an expert if you are new to stock investing. Remember it is a very risky area where the downside can be deep and in the worst case scenario you might end up losing all your money.

Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You


Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout