A Comprehensive Guide for Investing in the Stock Market in 2021

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A Comprehensive Guide for Investing in the Stock
Market in 2021
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Investment in the stock market can turn out to be
a little challenging for beginners who are new
to this industry. In this guide, we are going to
walk you through the 8 simple steps for making
the first investment in the share market. Lets
get started. Step 1 Get the Right Investment
Tools You can buy shares of a company through an
investment account. This account must be linked
to the Demat account as well as your bank. You
are supposed to log into the trading account to
purchase and sell stocks. To open a trading
account, you need to choose the company and
submit the personal details for account
verification. This includes your contact number,
email address, address and identity proof, name,
and other details. For ID verification, you can
upload any government-issued IDs. Once your
account is verified, you will be able to use it
to make investments.
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Your shares are held in the Demat account. You
could either open a new Demat account with the
trading account or use the existing Demat
account. Either way, it is important to link the
Demat account to the trading account to get
started with share investments. Additionally,
you have to link your bank account to the trading
account to process the online transactions. Step
2 Use Your Stock Trading Account You can start
buying shares of any company through your trading
account. Search for the company youd like to
purchase the shares from. You can also choose the
companies listed on the stock exchanges. Then,
choose from Intraday, Cash, and Margin trading.
If you are new to this market, consider cash
trading. Once you are done selecting the shares
of a company, the next step is to decide the
number of shares you would like to
purchase. Lets say your budget is INR 3000 and
the price of the share is INR 300. You can buy
10 shares of this company. You can enter the
price of the stock and make a purchase. Step 3
Dont let the Fear of Risk Affect your
Investment The share market is volatile. The
prices of the shares fluctuate on a regular
basis. There are ways to mitigate risks, but
risks are inevitable. You cant avoid it. You
dont have to worry about the security issues
when buying the shares online. However, its
important to pay special attention to the company
you are investing in. Many beginners have a
low-risk appetite, which is absolutely normal.
So, consider your risk-bearing ability before
making an investment, but dont let it affect
your investment decisions. Step 4 Reasons you
must invest in Share Market There are many
reasons why the share market makes an ideal
option for aspiring investors. First of all, the
price of the stocks tends to appreciate over
time, especially if you opt for long-term
investment. Secondly, the stock market offers
you a wide array of investment opportunities. You
dont have to limit yourself to the stock
investment. Try different investment instruments,
such as mutual funds, futures, commodities, and
ETF.
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• It allows you to diversify your portfolio. You
  could invest in different instruments to
  diversify your portfolio. It helps mitigate your
  risks. Even if a particular company
  underperforms in the market, you have other
  options to improve.
• Step 5 Risk Premium
• Risk premium could be defined as the reward a
  person earns for bearing the risks associated
  with the share market. One easy way to make the
  best of your investment is by identifying the
  best company for stock investment. It goes
  without saying that the more risk you are ready
  to endure, the higher the returns you earn.
• Step 6 Identifying the Best Stock for Investment
• Before you enter the stock market, it is
  important to research the stock exchanges and
  find the best company. The last thing you want is
  to end up losing all your money in the share
  market. So, invest in the stocks of a reputable
  company. The question is how you can find the
  best company for investment.
• Well, you could gather ideas about the companies
  listed on the stock exchanges through news and
  social media. You can also conduct your own
  research and use technical analysis tools to
  ascertain the past performances of the company.
  Note that the previous performance has nothing
  to do with the stock value of a company neither
  can it be used to determine the uptrend and
  downtrend. You can also take the help of a
  professional financial advisor. If you are still
  not certain about the investment, consider only
  the fundamentally strong shares.
• Step 7 Remember the Share Investment Tips
• While the growing technology has opened up
  several opportunities for investors, it also
  makes it a bit challenging for you to identify
  the right investment instruments. Some of the
  important tips you must keep in mind when buying
  stocks are
• Identify your investment goals. Remember the
  reason you entered the stock market. Do you plan
  on staying invested in the long-term or do you
  want short-term investment options? Determine
  your goals and make an investment accordingly.

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• Research suggests that an investment in the stock
  market can earn you up to 12 returns annually.
  But, thats just an average. You can earn more
  than that if the company grows and makes profits.
  You must think rationally. You cant become a
  millionaire from stock investment overnight.
• Always buy the stock when its price falls.
  However, that doesnt mean you can buy shares
  from a random company. You must create a list of
  the companies you would like to invest in. Make
  a purchase when the value of the stock falls by
  8 to 10 percent.
• Step 8 Minimum Investment Amount
• Surprisingly, there is no minimum limit as to the
  number of shares you could buy and the amount
  you have to spend. You can purchase shares for as
  low as INR 50. However, each transaction will
  incur a certain percentage of brokerage fees.