Dear Friends, Greeting of the Day. I will start this article with famous Quote “Stock Market is a place, where a person having Money has to met with a person having the experience and at the end of the day, person having the experience get the money and person having money get the experience”
Friends, as we all know in the current period Nifty and Sensex both are on the way to achieve there all time high. But during this journey, they have seen lots of Up and Down like Harshad Mehta Scam, 2008 Market Crash Etc. and have to face these situations in future also. As India is on the path of becoming Developing Country to Developed country, we cannot ignore the investment and growth opportunity which are coming in next 10-15 years. Stock Market has the potential to give high return on investment in comparison to our old investment instruments like FDR, Gold, traditional Life Insurance etc. but it comes with risk also.
As per survey, 99% retail investors lose their hard-earned money in 1-2 years and left the market permanently. But if investment is made with proper knowledge and staggered way it may fulfil our dreams. In this article, we will discuss, how a retail investor like you and me can investment in Stock market. Stock Market is governed by SEBI. SEBI is trying to safe retail investors from scams but we have to do our own analysis before investing in stock market. There are 2 ways in which, we can invest in share market – Investment in Shares by Directly purchasing shares of company and indirectly by investing in Mutual funds where we get units of particular mutual fund and mutual fund agency will investment our money in different company on the basis of their analysis.
Investment in Stocks Directly
For investment in stocks directly, we have to open Demit Account with stock broker. There are many stock brokers/ sub brokers in the market like Angle one, Zerodha, SMC etc. where we have to open account. Now, they have made account opening process very easy. In current time, you can open Demit account within 15-20 minutes. For that you require basic KYC like PAN Card, Aadhar Card and bank details. After submitting KYC in 1-2 working days your account will be open and you can start investment journey. If you want to start investing directly then you require Demit account which can be opened from below link: https://tinyurl.com/2c7xmuxv
Cautions and Precautions while making investment directly
As explained above, 99% retail investors lose their money in stock market, the reason for that is unawareness of market and trend. Below are the main reasons due to which they have to lose their hard-earned money:
> Investment in Penny Stocks
> Intraday Trading
> Investment in Stock market using Loan/ Margin Money
> Invest in company without any research about company fundamentals
> Invest in company on the basis of just its price behavior
> Expectation of high return within quick time period
> High investment at the starting stage
> Invest all money in 1-2 shares
As explained above, to earn money from stock market regularly, you have to compete with that 1% smart peoples which have required knowledge and experience. To compete with them, you have to gain required knowledge and experience which takes times like 2-3 years, which is not possible for all retail investors. To overcome this situation, you have the option to take the service of Mutual fund houses, where you have to give money to mutual fund house and they will invest money in stock market on our behalf.
Investment in Stock Market – Indirectly (Mutual Funds)
Mutual fund houses are also governed by rules and regulations as specified by SEBI. Mutual funds houses are managed by peoples having more knowledge and experience than we have. If we want to invest in Stock market but has no experience, knowledge and time them we can help of these mutual funds. They invest our money in many companies, where chances of loss of money are minimum in comparison to invest in stocks directly. Please note that mutual funds are also not 100% safe like FDR but they are safer then directly investing in stocks. For investing in mutual fund you have to open account with mutual fund house, which can be opened from here: https://app.groww.in/v3cO/gjdv0r1n
Cautions and Precautions while making investment through Mutual Funds
> Investment in mutual funds can be in the form of Lumpsum Investment or in the form of SIP which can be started from Rs.100/-
> For Maintaining our fund balance, these mutual funds charge Annual maintenance Charges which rate from 0.25% to 1% normally
> Some mutual funds Investment in Large Cap, Mid Cap, Small Cap. While Investing in these mutual funds, we have to check our risk capacity because large cap mutual funds are safer in comparison to small cap Funds
> Before Investing in any mutual fund, we have to check its past records and where they are going to invest our funds. Generally, mutual funds do not give negative returns in long term but there are some mutual funds that give negative return because they have invested in companies that are out of market now. Before investing in any mutual fund, we have to do some research about its funds manager, AUM Managed, Pass return records etc.
If you want to invest in Stock market then, you can choose either of the way. But always kept in mind that never put all your eggs in one basket and Share market is subject to market Risk. “Happy Stock Market Journey”
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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA. Shiv Kumar Sharma” can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737/ 9716118384
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