How To Invest In The Share Market Online: A Beginner Guide

How To Invest In The Share Market Online: A Beginner Guide

Are you new to the stock market? If so, then it might seem overwhelming to invest in the stock market. If you understand that the world of stocks, trading, and portfolios may seem complex and overwhelming at first glance to you as a beginner. However, with the right knowledge and a guide, you can dive into the stock market with confidence. Additionally, it's a good idea to invest in the stock market. Like, think of a place where shares of businesses can be bought and sold, and you can become part owner of the business.

By investing in the stock market, you not only get potential financial rewards but also get to experience an awesome journey with a company. So if you're wondering how to invest in the share market online, this article's for you. In this article, I'll tell you how to invest in the share market in India. Besides how to invest in the share market in India, I'll talk about what you should consider before you start investing so you can invest confidently.

What Is the Share Market?

Before we explore steps to invest in the share market, let’s quickly run over the share market meaning. Basically, it's a place where company shares are traded publicly. Shares are representations of ownership in a company. By purchasing shares of a company, you become part owner. As a shareholder, you get voting rights, dividends if the company declares them, and profit from share price increases. 

Any stock exchange allows you to buy and sell shares. As the company grows, its share price rises, increasing your returns. Moreover, it's possible to make a handsome profit in the long run when you invest in the right company. 

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Table of Content

  1. What Is the Share Market?
  2. Why Invest In The Share Market?
  3. How To Invest In The Share Market: Five Steps
  4. Factors To Consider Before Making an Investment
  5. Conclusion

Why Invest In The Share Market?

So, as a beginner, you may wonder why you should invest in the share market. So, here are the prominent reasons to invest in the share market:

  • A major reason to invest in stocks is their high long-term return potential. You can make a lot of money in the long run with stock investing, unlike fixed-income instruments that provide low returns. 
  • You can create a regular income stream if you invest in stocks that pay dividends. Plus, the stock appreciates in value. 
  • For long-term wealth creation, stocks are a great investment.
  • If you believe in a company, you may invest in it. So, you get to be a part of a journey that you truly understand and appreciate. 

How To Invest In The Share Market: Five Steps

Investing in the share market can be a scary thing if you're not familiar with it. However, with these 5 steps to invest in the share market, you can easily begin your investing journey with confidence. So, here are the steps to invest in the share market:

Step 1: Obtain A Trading And Demat Account

The first step on how to invest in the share market begins with opening a demat and trading account. You can purchase and sell shares with a trading account. Whereas, a demat account is an online storage account where you keep your shares after you buy them. Any SEBI-registered broker can open a trading account and a demat account for you.

Moreover, even if you do not need to open both with the same broker, you will find that your trading process is simpler when you have both a trading account and a demat account with the same brokerage house. Additionally, some brokers offer three-in-one accounts, which include a bank account, trading account, and demat account.

Step 2: Make A Decision About How To Invest In The Share Market Online 

To invest in stocks, you can either do it yourself or hire a professional to do it for you. If you believe you have the time to research and invest in stocks, you can do so using your trading and demat accounts. Or else, you can choose experts to invest in the stocks and create a portfolio for you.

Step 3: Decide Which Stocks You Would Like To Invest In 

You can invest by yourself, by making your own portfolio blueprint and picking the stocks you want to buy. You can start by picking stocks with a proven track record of good performance. A good place to start is with companies that are part of indices like the Sensex or the  NIFTY.
 

You can even start with an index ETF. ETFs aim to create a similar portfolio as Index and offer similar returns. Also, as you learn more about stocks, you can invest in other companies and create a portfolio that fits your investing goals. 

Step 4: Keep Building Your Portfolio

Consistency is key to building a strong portfolio that can help you reach your long-term goals. So, grow your portfolio and invest in more stocks over time. Moreover, it's good to have a diverse portfolio that includes stocks from different industries. However, don't over-diversify. To make the most of your investment, invest in 10-12 solid companies. Similar to a mutual fund SIP, you can invest in stocks periodically via a Systematic Equity Plan (SEP).

Step 5: Be Sure To Monitor Your Portfolio 

Make sure you monitor your portfolio regularly. Watch the stocks closely to see whether they are performing as expected. Whenever a company consistently underperforms, consider replacing it with another one. It is crucial to monitor your portfolio to ensure that it is performing well and is able to grow at the pace you expect. 

With the above-mentioned simple steps on how to invest in the share market, you can start trading on the stock market. Nevertheless, before making your first investment in the stock market, be sure you know what to consider.

Factors To Consider Before Making an Investment

Here are the three main factors that you need to consider before making any investment:

Identify Your Financial Goal

The first thing you should do if you are interested in how to invest in the share market online or any other investment avenue is to identify what your financial goals are. Also, each investor has a different investment objective, which varies from person to person.

Hence, you should pick stocks after considering your financial goals. Before investing, determine your investment horizon as well.

Identify The Risks You Are Willing To Accept

The level of risk you are willing to accept is another important factor to consider when investing in shares. For investors with low-risk appetites, defensive stocks may provide stable returns and are less volatile.

Build Diversified Portfolio

To minimize risks, you should build a diversified portfolio. The more your investments are spread across different sectors, the lower your financial risk will be.

Conclusion

An investment in the stock market can be a rewarding experience, offering long-term growth and the chance to be part of a company you believe in. Following mentioned steps on how to invest in the share market in India will help you start investing in the share market confidently.However, before making any investment, consider factors such as your financial goals, risk appetite, and building a diversified portfolio. For beginners, an excellent app to consider is the blinkX share market app. With its user-friendly interface and educational resources, you can make informed investments.

How To Invest In The Share Market FAQs

An easy way to invest in shares is to open an online brokerage account. If you don't feel comfortable managing your portfolio, you can hire someone who does, often for a reasonable fee. Also, no matter what method you choose, you can invest in stocks online and begin with little money

Yes. You can begin investing in the stock market with 100 rupees. You can gradually increase your money by investing in the stock market. Most people believe that large amounts of capital are needed to invest in the share market, but this is not true.

Yes. There are some undervalued stocks from small companies that you can purchase for less than 50 rupees. However, the key to getting good returns from these stocks is to stay invested for a long time.

Experts suggest that beginners should invest in at least 10 to 15 different stocks to properly diversify their portfolio if they intend to invest in individual stocks.

Swing trading is an excellent option for beginners because it allows them to hold an investment for longer than one day and less than a couple of months. Compared to day trading, it takes less time and is less stressful.