Investing

Step by Step Guidelines to Invest in Share Market

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Economies around the world are in a buoyancy phase. Indian economy is one of the fastest emerging economies of the world. Usually rising or falling economies are judged by their share market performance. Investment in Indian share market is one of the ways to increase your returns on investments. The best thing regarding investment in share market is that minimum amount is very low. Once all formalities (account opening, etc) are completed one can invest as much as one feels (starting with few hundred) and the time, as and when can be decided by oneself (when to invest). Unlike in reality where you need a good amount and the property should be available for sale. Most of the people invest in share market (getting tips from stock advisory company) because it gives one of the best rates of returns as compared to a bank or mutual funds or reality and gold. Though, as with any investment, the risk is also associated with it. This attractive return on investment has a magnetic effect on people and they are attracted towards share market and share market tips. And many wish to open account and trade in share market. So the question arises how to invest in shares. Choose depositary participant (DP) and open demat account The depository is an institution which holds securities such as shares, debentures, mutual funds, etc. and in which trading is done. Basically, there are two depositaries in India National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL). DP is the intermediary between depository and the investors. He is registered as such with SEBI. Just like a bank account, one has to open an account with the DP. Account opening forms are available with the DP which has to be filled and submitted. List of DP can be downloaded from the internet. Demat account is for holding your shares in dematerialized or electronic form. Choose stockbroker and open trading account

Depending on the type of trading one wish to do he can open a trading account with a full-service broker or discount broker. Full-service broker apart from selling/buying shares, provides a host of other services like research, advising etc. It is good for those investors who wish to hold their securities over a considerable long period of time. Discount brokers only provide services of selling/buying. It is good for those traders who frequently buy/sell shares usually called day traders. One has to fill the form and submit the form providing details of identity and address proof like PAN card, Voter ID, birth certificate etc. Presently Aadhaar card is necessary and serves both as address and identity proof. Choose a bank and open savings account A saving account has to be opened in a bank. Bank accounts are needed for the fund as transferring to and from DP. Prescribed forms have to be filled and required documents like PAN, Aadhaar card, photographs etc are to be submitted to the bank. Know your customer (KYC) has to be filled and has to be compliant everywhere. One can get stock market tips to get better returns on your investment. There are certain banks like SBI, ICICI, HDFC, Axis, Kotak Mahendra and Citi bank which have a facility of 3 in 1 account. (Demat, trading, and saving). There are certain brokerage firms where one can have both demat and trading account. Angel Broking, 5 Paisa, Sharekhan, Motilal Oswal, Ventura, Zerodha, Religare, RKSV etc.

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Robert B. Wilfong

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