Investing in stocks should only be done when you have a thorough understanding of them. Being a newbie/amateur doesn’t have to imply being illiterate. Being a novice with no prior knowledge of the market might lead to significant losses. That would be a disaster. So, first and foremost, let us define stock and stock market.
A stock, often known as equity, is a fractional ownership interest in a firm. Stockholders are entitled to a share of the corporation’s assets and revenue to the degree that they possess shares. Stocks are divided into shares.
Where do we go to Investing in stocks now?
The stock market is the answer.
Individual and institutional investors meet at stock exchanges to buy and sell shares in a public setting, which is known as a stock market. These types of exchanges now occur in the form of e-commerce. The price of a single share of stock is determined by supply and demand in the market when buyers and sellers submit orders.
Now the question is, how to begin investing in the stock market?
Documents are the first thing that must be provided! Before starting to invest in the stock market, there is a short list of documents that must be obtained. This is what it is:
- Pan Card
- Aadhar card
- A cancelled check with the active account holder’s name on it
- A proof of residence based on a list of documents that have been accepted by the broker, depository participant or bank
- Documents entailing and proving that you earn an income
- Passport size photographs
After gathering all of these necessary documents, a Demat account must be opened. Now, the Demat account is a completely new phrase, therefore let’s have a better understanding of it.A Demat account and a trading account are essential for beginners who want to invest in stocks.
To open Demat and Trading account for beginner i will suggest for Zerodha trading account- very simple and easy to use- Click here to open account with zerodha
Now lets understand how this demat trading account works..
The account holder’s shares are held in a Demat account. A Demat account’s shares are kept in an electronic vault. It is opened online with the help of a depository participant. Several banks also provide investors the opportunity to open a Depository Account.
A Demat account has been “dematerialized,” which means your shares are stored there.
Since we’ll be buying and selling stocks, it’s self-evident that we’ll need money to do so. However, cash isn’t an option in this situation. It is necessary to have a linked bank account. When you trade, this ensures that money moves smoothly into and out of your account.
When you open a Demat and trading account with a broker, they will usually ask for this. You can now have both a Demat and a trading account in one convenient package. Some brokers also allow you to trade directly from your bank account and store your securities in the same place.