Thinking of the Stock market as a beginner makes you excited as well as curious about how it works, what are the ways to invest, what are the right funds, do we need to open a Demat account, can I lose my money, or I’ll become rich quickly. A lot of questions come to our mind. So in this article let’s try to figure out these queries which arise in our mind at the beginning and we will also provide one NINJA tip for beginners so that they will get comfortable with the stock market.
What is the Stock market?
It is a place where the shares of the listed companies are held for buying and selling where buyers and sellers come to transact their share. There are so many types of industries companies listed from whom you can choose according to your preference.
What are the ways to invest?
There are so many ways you can put your funds into the stock market so let’s take a look into few ways:
- Equity shares: You can directly buy the equity shares from the stock market by applying your analysis. As equity represents the share of ownership in the company you can now guess your earnings, maybe it goes very well may be it declines. So this is very volatile in nature, it is a high- risk high-gain type of investment.
- Debenture/Bonds: You can also buy the debt/bonds from the stock market if you are interested in playing the safe in the market you all have is your fixed interest on a periodical basis. This kind of investment is generally opted by the older generation who don’t want to take a risk and want their timely pay in the form of interest.
- Mutual Funds: This is a kind of safe play while taking a little risk to earn more than debt can be less risky than equity. This is a place where beginners or people who want to invest but don’t know how to manage all these things park their money. A fund manager is dedicated to allot your funds in the best possible shares by making a portfolio of shares in which he considers a variety of shares like extremely, moderate, and less risky shares.
There are many more ways through which one can invest in the stock market like F & O (futures and options) or through derivatives or commodities but these are for the person who is very experienced and possess knowledge in this field as this kind of investment is a very risky game.
NINJA TIP: Here we go for one ninja tip for beginners called Paper trading.
Like before a pilot flies an airplane he will take a virtual simulation practice so that he will get comfortable with all the systems and features and actually feels the experience of flying a plane without even flying in reality. Same can be done in the stock market. You can take the help of virtual software which is free of cost which you can download and understand how to deal with shares in the stock market and it will give you the same response as if you are putting your real funds without even spending a single penny. In the past when we didn’t have this software we could perform the same with a pen and paper but that is a little tricky but now you can easily do this with the help of software. And the best thing is you actually don’t need to open a Demat account for the same.
Question regarding opening a Demat account?
Yes in order to start investing in a stock market you have to open your Demat account. But for the beginners, it is a good option to opt for a discount broker who helps you to open the Demat account with a nominal fee otherwise you will have to pay more for normal brokers.
But here is another option, if you want to start investing through mutual funds you need not open a Demat account you can directly buy the units of mutual funds through various online companies or even through broking firms.
So before getting into the stock market do get proper knowledge about it and don’t invest your hard-earned money only by listening to someone’s opinion. Use the Ninja tip to practice more. All the best.