How To Invest Money In Stocks Market
Always wondered how to invest in shares as a beginner? The following guide will detail this process for you. Keep in mind that there are two types of share markets you can invest in. These are primary and secondary share markets as detailed below.
1. Investing in the Primary Share Market
It is typical for corporations to offer up their shares on a primary share market through a process known as an initial public offering. This means that when one chooses to invest in the primary share market, they can do so through an initial public offering or IPO. To invest in both primary and secondary markets, it is necessary for a trader to have their own Demat account which will hold electronic copies of their shares. Additionally, a trading account is also important which will help in buying and selling shares online. In a few rare cases, it is also possible for a trader to apply directly from their bank account. Based upon the market’s response to the initial public offering, a trader will be allotted a select number of shares. Once all the IPO applications are received and counted by the company, those shares are allotted based on demand and availability. It’s quite easy to apply for an IPO through your net banking account via a process that is known as Application Supported by Blocked Amount (ASBA). As per the ASBA process, if one applies for shares that are worth ₹1 lakh, instead of being sent to the company, these funds will be blocked in their bank account instead. Once you receive your allotment of shares, the exact amount will then be debited with the balance being released. All applications that are sent to IPOs are required to follow this protocol. Once shares are allotted to traders, they are listed on the stock exchange, and you can begin trading them within about one week’s time.
2. Investing in the Secondary Share Market
The secondary market is usually what traders are talking about when they refer to stock market investments. Curious about how to invest in stock markets as a beginner? Here are a few key steps toward doing so:
Step 1: Similar to a primary market, a secondary market also requires that you have your own Demat and a trading account. This is the starting point to invest in the secondary market. Both of these accounts should be linked to a pre-existing bank account for a seamless transaction.
Step 2: The next step is to log into that trading account. Then go ahead and choose the shares that you wish to sell or buy. Ensure that you have the requisite amount of funds in your account that can help you buy the shares. Alternatively, if you wish to sell, make sure you have the right number of shares before you choose to sell.
Step 3: Next, decide the price at which you want to buy a share versus sell it. Wait for the buyer or seller to reciprocate that request.
Step 4: Complete your stock market investment transaction by transferring the money/shares and you will receive money/shares.
As detailed above, the steps for how to invest in stock markets are very straightforward and simple. Ensure that you are mindful of the time which you wish to remain invested in and the financial goals you want to achieve from your investment.
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