Therefore, savings also sometimes do not happen. But you also know that savings are useful in difficult times.
So saving money is very important. In such a situation, there are many options to save money. But one interesting way is to buy shares. This not only saves money but also increases.
In such a situation, you must take information related to buying shares. So today we are going to tell you the complete information related to buying shares through this article So that you can know what are the shares, how to buy them and what are to be kept in mind while buying the shares.
What is Share?
A share is also called stock and equity. Share means a stake in a company. That is, if you have any company shares, then you become the owner of that share of the company as much as you own the shares. And in this way, you become a shareholder in a company.
After purchasing the shares of a company, you get all the rights that are with the shareholder. You can buy and sell your shares in the stock market as well.
What is Share Market?
On hearing the name of the market, we think that there will be a huge market in which there will be a lot of shops, but the share market is completely different from this image.
Buying and selling shares in a share market are done entirely by computer. And if we talk about the process of buying shares in the share market, then it is a bit different.
Here there are brokers who are members of the stock exchange and they have the right to trade on the stock exchange. Customers cannot buy or sell shares directly. Rather, this work can be accomplished only with the help of a broker.
Now the next question arises, where are the shares bought and sold? In India, this work is mainly done on two stock exchanges i.e BSE(Bombay Stock Exchange) and NSE(National Stock Exchange). So they are considered the world’s largest stock exchanges.
Currently, there are about 25 stock exchanges in India. And most of the companies whose shares are bought and sold in the market are listed on one of their stock exchanges or both.
So, after so much information, you must have understood that buying shares is not so much a difficult task, but an interesting and profitable task.
Now let’s see the complete step-by-step guide on how to buy shares?
How to Buy Shares?
1. First Get Your PAN card
In the process of buying shares, you will need a PAN card for financial transactions. So, first of all, keep your PAN card ready.
2. Choose a Good Broker
You have already realized that you cannot direct the work of buying and selling shares. Rather, it can work in the share market only with the help of a broker. That’s why you meet a broker. A broker can also be an individual or can be a company or online agency which is valid by SEBI.
In order to entice the customer, many brokerage firms make different brokerage schemes which have varying fees ranging from 0.001% to 0.005%. Some brokerages also charge at a flat rate. In such a situation, it is important to choose the broker very wisely.
3. Open Demat and Trading Account
After selecting a broker, you should also have a Demat and Trading account, only then you can buy or sell shares. Your shares in the Damat account remain in electronic format and you can buy and sell shares through the trading account.
According to SEBI Guideline in India, Demat service offers 2 institutions i.e NSDL (The National Securities Depository Limited) and CDSL (Central Depository Service Limited). So both these institutions are called depositories. To open both these accounts, all you have to do is go to your broker or brokerage firm where both your accounts will be opened easily.
4. Buy the Shares
It means to say that you have chosen a broker and you also have a PAN card, Demat account, and trading account, so now it is time to buy shares. While buying shares, you can place orders in two ways i.e at market rate or at a limited rate.
Market rate means buying at the same rate at which the stock is trading in the stock market. Whereas the limited rate means that you can tell a limit that a broker should not buy shares for you when the rate is high.
5. Get Your Dividend
A dividend means dividend that is paid to a shareholder by a company whose shares have been purchased by the shareholder. The portion of the company’s profit that is received on those shares is called dividend.
It is the right of the shareholder to receive the dividend on his shares. This can be in the form of dividend cash or stock. If the dividend is in the cash form, then it will reach into your bank account directly.
With the understanding of this simple process of buying shares, let’s take a little information about selling shares.
Also Read: 5 Pro Tips To Invest In a Mutual Fund
How to Sell Shares?
If you want to sell your shares, then the shares you want to sell should be in your Demat account. After this, as soon as you sell the shares with the help of a broker, those shares will be removed from your Demat account and in about three days the amount of the shares sold will reach into your bank account.
Broker’s share will be deducted from this amount and will come to you. In how many days the number of shares sold will come to your account, it will depend on the category of the shares.
Which company should initially buy shares?
Mid-cap and small-cap stocks are more likely to grow. It is also important to know what things should be kept in mind while buying shares of a company.
While buying the shares of any company, you will have to consider all these things so that your savings are in the right place and you can get maximum profit.
- For example, in the last 3 to 5 years, financials have remained strong and you can also check the record of 3 months of the company. You should also check on what is the EPS, how much is the pay ratio, how much is the book value and whether the company is continuously paying a dividend.
- Apart from this, you can also read the balance sheet of the company. After collecting this much informations and if you will feel that the company is in profit only then you buy the shares of that company.
- Apart from this, take this information also, what kind of services the company provides to its customers.
How Much Money Required To Invest In Stock Market?
There is no limitation of money to invest in the stock market. Here you can start with just 1 rupee. That is, the less money you have to invest, the more you can start from that. Just keep in mind that you should come to invest the money in the right place so that every rupee invested can give you an advantage.
Now let’s talk about how to buy shares online.
How to Buy Shares Online
If you want to buy shares online then follow these steps.
- Get Ready Your PAN Card
- Choose the best Broker
- Open Demat and Trading Account
- Create a savings account so that you can transfer money to a broker’s account.
- Tell the broker which shares you want to buy at what price.
- While buying shares online, keep the correct information on the broker’s software so that you can avoid making wrong orders.
By following the above process, you can easily buy shares online. Buying shares is neither an easy task nor a difficult task. How much profit will be made in this and how many times you will miss it all depends on your research, your interest and the right choice of broker.
What Rules To Be Follow In Stock Market
Rule #1: Do not forget to do a deep study of the company whose shares you want to buy.
Rule #2: Invest in the shares of the company you know about.
Rule #3: When investing, instead of being a part of the sheep walking, use your own understanding.
Rule #4: The stock market keeps moving high and low, so be ready to take the risk, but keep in mind that this risk is only for a limited time.
Rule #5: Start keeping patience in you whenever you entered in the Share Market.
Rule #6: Give space to every type of asset class in your portfolio, ie make the portfolio broad.
Rule #7: Always try to invest in the share market when you have the extra funds in your account.
Rule #8: Keep a close watch on the records in the share market.