How To Invest In The Stock Markets

As an investor, you might be thrilled about stock market trade, stock charts, stocks App and more. The thirst for Stock market knowledge is hard to quench as you start with ways to investing in stocks. This can go to an advanced level of stock market trading or derivatives for online stock trading. Just Google, “how to invest in stock market” and there would be tons of material to read and learn.

But don’t be afraid of the exhaustiveness of the stock market trading strategies. We are here to make your stock market for beginners journey simple. 

Here is a four step approach to investing in stocks: 

Step One – Know Yourself First 

Before you learn to buy shares of any company, you need to learn about yourself. 

There are two major parts to learning about yourself: 

Your Financial Goals

Your financial goals are nothing but the reasons why you are investing. You can start with listing them down and dividing them into short-term, medium-term and long term goals. However, it is essential to ensure that they are SMART (Smart, Measurable, Achievable, Relevant and Time-bound). 

Your Risk Appetite

Once you have your list of financial goals ready, you can move towards analysing your risk appetite. Risk is an important factor to dominate your stock market trade decisions. Answers to questions like “where to invest money in stock market india” and “how much should i invest in stock market” to a great extent depend on your risk appetite. 

Your risk appetite would largely determine whether you choose smallcap or midcap or large-cap stock for investing. 

But what is risk appetite, what determines it and its usage while you invest in stock market? 

Your risk appetite depends on factors like your age, income, profession, geographical location, compulsory expenses, number of dependents in the family, emergency corpus and more. Your risk appetite can also differ for different financial goals based on their duration. 

For example, if you have a short-term financial goal, your risk appetite for the same would be lower than medium or long-term goals. 

Once you have figured out yourself, you can start looking for avenues for online stock trading.

Step Two – Open a Demat Account

After knowing yourself, the next step would be to look for a suitable demat account for investing. HDFC Sky is the best trading platform built to suit the needs of traders and beginners alike. Choose the app for real-time trading updates and stock recommendations. 

You need a bank account, a trading account and a demat account for any kind of stock market trading. These are available in two-in-one or a three-in-one demat account variations. While the trading account executes trades, the demat account is used to store shares in a dematerialised form. So, when you buy shares, your trade gets executed from your trading account and stored in your demat account. 

Usually, stocks app or online brokers with the three-in-one feature are more expensive than the two-in-one feature one. 

Three-in-one Demat Account

This demat account combines your demat account, trading account and bank account into one. You do not have to transfer money from your bank account to your demat account for trading. As you trade, your transaction value along with other transactions gets automatically deducted from your bank account post trade settlement.

Two-in-one Demat Account 

In this account your demat account and trading account are combined, but your bank account is separate. To trade using the two-in-one account, you can either add funds to your demat account for trading or trade on margin. 

By knowing the different stocks App features, you can choose a suitable demat account.

Stock market app also have add-on features like an exhaustive list of stock charts and material to learn share market for long term investment in stock market. 

Key determining factors to choosing a stocks App are brokerage fees, UI and UX capability and smoothness, real-time market data accuracy, grievance redressal and app size. Furthermore, you can look for features that offer educational and research material to answer questions like: 

1. How to start investing with little money?

2. How to learn share market 

3. What are the nitty gritties of the stock market how to earn more than index? 

4. How to trade in stocks?

5. What to look for while investing in stocks? 

6. Should I invest in this market? What are the current stock market risks?

7. What are the reasons behind the volatility in the stock market today?

Step Three – Scout For Stocks to Invest In 

Moving ahead, you can start scouting for stocks that can match your risk appetite and financial goals. 

Does that sound tough? Don’t worry! Many stock market broking apps offer recommendations and tips that might help you translate into stock investment advice. Furthermore, you can look for investment advisors and get paid stock investment advice from a SEBI registered investment adviser. 

You can choose among market capitalisations (micro-cap, small-cap, mid-cap and large-cap), industry, sector and business. You can also do advanced research on technical and fundamental analysis of stocks. There are stock broking portals that offer daily trade recommendations and technical and fundamental analysis on various stocks. You can check and compare various stock market broking apps for advanced strategies on risk-smart trading. 

It is crucial to note that no matter which stocks you choose, you can benefit by aiming for diversification, tracking and timely review of your portfolio. Apart from these, choosing between short-term trading and long-term investing, or a mix of both is also an important decision. 

Step Four – Add Funds And Get Started  

Now you know where to learn stock market, where to invest and how to invest in the stock market? So, now it’s implementation time! This is the final step to informed investing in stocks. 

So, if you have a three-in-one demat account, you don’t have to worry about this step. But for those who have a two-in-one account, you need to transfer money from your bank account to your demat account for trading. 

To add funds to your two-in-one demat account you can use various transaction mediums like UPI, debit card, netbanking and more. 

Finally, the last step is to buy shares of your choice. Wait, it is not over yet. As discussed in the previous step, do not forget to track and revisit your stock portfolio from time to time.

Conclusion

Starting a stock market trade is simple if done in a step-wise and informed manner. Your stock market trading journey can start with knowing yourself (your financial goal and risk appetite). Next steps should be to open free demat account of your choice, scout for stocks, add funds and start investing/trading. The HDFC Sky portal can help you with an extra edge to your overall trading experience. Check out HDFC Sky now for an upgrade over your usual trading experience. 

*Changed “stock market how to earn more then index” to “stock market how to earn more than index” for grammatical correctness.