Investing in your 20’s is probably a smart decision. That’s when you are willing to take risks. Well, safe risks. We all save money in the bank, but is that increasing our wealth like we want to? Probably not, but if that money is carefully invested in the stock market, you can be taking your investment game a notch higher.
But the question of what is the stock market and how should you invest in it rises. Fret not, what you’re about to read will ease all your concerns and give you a fair knowledge of the intricate world of the stock market.
What is the stock market?
The stock market is a place where people come together to invest in stocks they feel are worth buying or selling. This market unlike the regular markets we visit doesn’t take a break, it continuously stays open for investment. The price of the stocks also unlike regular products isn’t fixed and changes every hour. The stock market is as unpredictable as life can be.
But, it’s also one of the biggest ways to multiply that number you’ve been saving in your bank account. The stock market comprises hundreds of registered companies that sell their shares to independent buyers.
How does the stock market work?
When you buy some stocks/shares in a company, it means you’re getting a certain percentage of ownership in that company. So if the company does well and gains profit, you’ll be directly benefiting from that profit and if the company performs poorly, you can lose the money you have spent on the shares. If the demand for a specific company is higher, more people buy shares in that company.
When an increased number of people invest in a brand, it helps them to grow and expand their business which results in a bigger profit.
This way the companies don’t have to bear the stress of getting big financers, they are supported by hundreds of micro investors. These investors gain more money as they’re given a share of the profits. Investors can sell their shares whenever they want to. If the price of the shares go up from the price they were purchased at, let’s say if each share cost ₹100 at the time of purchase and after some time its price goes up to ₹150, these shares can be sold and the investor will get a profit of 50% from the invested money which is a great deal.
How do I get started?
To start your journey in the world of the stock market, thankfully in the age of the internet, there are only a few things that you need.
1. Bank Account
2. Trading Account
3. Demat Account
So, most of us have a regular bank account but you need a trading account to invest in the stock market and a Demat account to store the money from the stock market. However, a lot of banks these days are providing a 3 in 1 account option and you can go for the same if you wish to. If you choose to go for a broker to invest for you in the stock market, they will charge a certain commission which will have to be cut from your profits. To avoid this, you can choose to do some research and invest by yourself for maximum return.
There are two ways you can be a part of the share market. Either you are a trader or an investor. If you get into trading it will require a lot of time and dedication as you will have to quickly invest somewhere and then sell your shares another day. It is very short-term and is all about technicality. A lot of people choose trading as a career because the returns are lucrative. And, If you choose to invest over trading then you have to wisely choose the brands and be patient with the returns. It is long-term and the benefits can be huge if the brand grows bigger. You can invest in as many companies as you want to but make sure the investment amount is balanced.
Do’s and Don’ts for stock market beginners
Only invest in the brands you have proper knowledge about. Make sure you spend your hard-earned money with care.
Never listen to your friends and relatives and invest only because they are saying a particular brand is doing well.
Speak with an expert before investing in the stock market as it’s a risky business, talk to the veterans of the stock market investment.
Keep looking for a proper time to buy and sell off your shares. If it’s profitable then don’t think twice before selling the shares.
Get a broker if you’re not prepared enough to invest by yourself.
With that, we leave you to explore the amazing world of the stock market where you can increase or decrease your wealth depending on your choices. Make sure you go and secure those profits because we know you can!