Many people get scared of the thought of investing in the stock market. Investing in the stock market is not everyone’s cup of tea. You got to have the right skills and knowledge to understand which stock to purchase and which not. The beginners entering the market do not have any idea about share market investment. To help them in doing so, we list down certain points that will help them in investing in the stock market.
How to Start Investing in Stock market?
The first and foremost thing that beginners must do to invest in the stock market is to open a demat account. The process of opening the demat account is as follows:
- Select the broker and fill the account opening form.
- Along with the account opening form,you will have to submit some compulsory documents. The documents required for demat account opening include PAN card, proof of address, proof of identity and passport size photograph.
- The broker will hand over to you a copy of the rules and regulations of the agreement.
- A person from the broker’s office will visit your place to carry out In-Person verification. This is done to ensure that details given in the account opening form are true and correct.
- On successful processing of the demat account application, the broker will provide you with a demat account number and client ID. You can log in to your demat account using the client id.
Things to Keep in Mind While Purchasing Stocks
- Check the earnings growth of the company. If the profits of the company are constantly rising it can be a good bet for the long term.
- Check if the company is constantly giving dividends. Dividends act as a permanent source of income for the long term investors and such stocks are worth investing.
- Always ensure that the debt-equity ratio of the company is manageable. A company with high debt would always be a risky investment bet.
- Always check the relative strength of the industry in which you are investing. Check whether the stock will show a promising future and well placed against its competitors.
- Check the valuation of the company before investing. A company with a price to earnings ratio higher than 10 is not a good investment.
- Management is the backbone of any company. A company having strong management with no bad history is always a good investment bet.
- Always monitor the stock you are holding in your portfolio. Make sure that you place the stop loss too. Having stop loss in place will help you in minimizing your losses in the stock market.
The above mentioned are all about share market for beginners must keep in mind before investing. By following the above guidelines the beginners can easily invest in the stock market. Want to learn more about stock market, then beginners can visit Trading Fuel. We provide free blogs and articles on the stock market to the investors. With our blogs and articles, you can become knowledgeable and learn more things about stock market investment every day. Subscribe to our website and enjoy free stock market content.