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1 / 9Investing in the stock market can seem like a big task or even a hassle. However, with the correct strategies and information, it is easy to make informed decisions about equities. Here is a guide to help you begin your journey into stock investment.
2 / 9Stocks are representative of a person’s ownership in a company. Stock prices can be volatile, based on policies, market changes, how a company performs, and the subsequent expectations investors have about them. There are two types: primary markets, which offer Initial Public Offerings (IPOs), and secondary markets, which allow for stock trading.
3 / 9You will first need two important accounts: a demat account and a trading account. The Demat account stores all shares that have been bought in an electronic form, whilst the trading account allows for the purchase and selling of shares. You can open these accounts with registered stockbrokers, preferably one with affordable charges and reliable services.
4 / 9To make informed decisions, you will have to understand both technical and fundamental analysis well. Fundamental analysis is about analysing a company’s finances, including profit, revenue, financial statements, etc.
5 / 9On the other hand, technical analysis involves the examination and analysis of stock price patterns to pinpoint possible trends and future changes. Developing these skills is crucial to examine the growth potential stocks possess and to subsequently make decisions in line with your long-term investment aims (Photo: Reuters).
6 / 9The best way to begin is to start researching on companies in industries you have solid knowledge of. Analyse these companies’ growth potential, market trends and their performances in the past using online resources and tools at hand (Photo: Reuters).
7 / 9The key is to start small and then diversify. Begin by investing small amounts and diversify your investments across different companies and even different industries. Diversifying lowers risk and the adverse effects of low performance. Ensure you begin with a small amount from your savings that will not cause many problems if lost. Keep monitoring the portfolio and stay updated on any trends,
8 / 9Stock markets are often unpredictable in the short run. But it has most often provided gains in the long run. Patience and discipline are both highly necessary qualities if you want to generate wealth from stocks. While short-term investments are immensely satisfying, experts recommend long-term strategies.
9 / 9Purchasing shares deducts money from your bank account, which are added to your demat account. Selling shares transfers them from demat to the market, and proceeds are credited to your bank account.
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