How to start investing in the stock market in India- Beginners lesson
A lot of us don’t understand about stock market . One of the main reason is that from childhood , most of Indians are not taught about stock market.Also they consider stock market as gambling and risky when compared to other financial instruments . However , its not risky when investing is done in proper way controlling and managing risk.
There are primarily two ways to invest in stock market in India.
1>Through Mutual Funds
2>Through Directing purchasing Stocks
For beginners, its always recommended to invest through mutual funds. When you purchase mutual funds, you basically give your money to a group of experienced and professional Fund manager who buys and sells shares on your behalf in exchange of small fees called management fees. However they take care of all things and can do it better with less risk and protection of capital. The downside is that your return may be a bit less. Click here to know How to invest in Mutual Funds online – buy direct Mutual Funds
If you have knowledge of stocks , then you can invest in stock market yourself . This is more risky compared to investing in mutual funds, however you have benefits of getting higher returns than mutual funds. You have to select 8-10 stocks from different sectors and create a portfolio of stocks. This is called diversification so that even one stock or one sector doesn’t do good, your other stocks may do good. However you must know how to select stocks for investment for this.
To start investing in stock market , you need to have a demat and trading account. Read how to open demat and trading account in India and start investing.