Stock Market Basics: 11 Simple Tips For Beginners

In today’s time, instead of keeping their money in the bank account, people want to grow it by investing it in the share market. But most people get confused on hearing the name of the stock market. Or they start getting scared on hearing the name of the stock market. If the same happens with you, then after reading this blog post, all your doubts will be cleared. Because in this blog I have explained the stock market basics in full detail. In countries like America, about 60% – 65% people invest in the stock market and if we talk about India, then only about 5% – 6% people invest in the stock market. We still have a chance to create good wealth from the stock market. As the number of people in the stock market increases, the share market will go up. If the share market goes up, our money will also increase.

Best Stock Market Book – Stock Market Basics

RICH DAD POOR DAD ENGLISH

RICH DAD POOR DAD HINDI

LEARN TO EARN BY PETER LYNCH ENGLISH

INVESTONOMY ENGLISH

INVESTONOMY HINDI

What is Stock Market

Share Bazaar is like a vegetable market. Just like you can go to the vegetable market and buy the vegetables you want. Similarly, in the share market, you can buy the shares of the company whose shares you want. You just need to have the money to buy those shares.

Why are companies listed in the share market?

Let’s assume that you want to start a business and you need 10 lakh rupees. So you can have 10 lakh rupees in your own savings. Or you can borrow it from any of your relatives. If you take a loan from the bank, the bank will start taking its installments after 2 months or 3 months and sometimes it takes many years to make a business profitable, so in such a case you cannot take a loan from the bank. Let’s assume that you have started your business. Now your business is running very well and now you want to expand your business further. So in such a situation you need 1000 crore rupees. Now neither any bank will give you a loan of 1000 crore rupees nor does any of your relatives have that much money. So in such a situation comes the share market. What companies do in this is that they launch their prospect. In which the company tells what work the company does and how is the future of the company. After this the company launches its IPO. And it fixes the price of its shares. After that people buy the shares of that company and give money to the company. The benefit of the investor in this is that he can invest money in his favorite business through the share market. All these things are under Stock Market Basics.

How to earn money from Stocks?

People who do not have a strong Stock Market Basics often have this question in their mind that how to earn money from shares. So whenever you buy a share it means that you are buying your stake in that company. If the company whose share you have bought does well, it means that the sales of that company increase and the profit of the company increases. So people will buy more shares of that company and the price of that share will increase. If the price of the share increases then you will get profit. Many companies distribute some money from their profit to their shareholders through dividend.

Where to open Demat & Trading Account?

 

Demat Account: It is called when whenever you buy any share and keep it in your portfolio, then you are keeping that share in your Demat Account.

Trading Account: It is called when whenever you buy or sell any share, then whatever transaction you do while buying or selling the share, you do it through Trading Account.

Note: Demat Account and Trading Account are opened simultaneously. When you open the account, you will not even know which is Demat Account and which is Trading Account. You do not need to get confused in this.

You can compare any Broker App through 3 Steps

1. Account Opening Fee

2. AMC Charge = Annual Maintenance Charge

3. Brokerage Charge

Broker App	Account Opening Fee	AMC = (Annual Maintenance Charge	Brokerage Charge
			Equity	Intraday
Groww	₹0	₹0	0.1%	0.1%
Angel One	₹0	₹240	₹0	0.03%
Zerodha	₹0	₹300	₹0	0.03%

Account Opening Fee = When you open your Demat & Trading Account, the fee charged there is called Account Opening Fee.

AMC Charge = When you buy and keep shares in a Broker App, then that Broker App charges you some fee, which is called AMC Charge.

Brokerage Charge = When you buy or sell a share, the charge levied on it is called Brokerage Charge.

Set your goal

You should know about your goal that what you want to invest for.

1. You want to create wealth.
2. You are making your retirement plan.
3. You are investing for your children’s school or college fees.
4. You are investing for travel.

Note: For whatever purpose you want to start investing, you should take risk according to that purpose only. Too much risk can prove to be dangerous for you.

How much amount should one start with in Stock Market?

Many people have a question that how much money should we start with in Stock Market? There is no right answer to this but you should start with less money. If you are young or you are a student and you do not have much money, that is why you are away from Stock Market, then there is good news for you, you can start Stock Market with ₹ 5000 as well. As you leave student life and start working and your income increases, you can also increase your amount in Stock Market. And you can create a very good wealth. You should start with less money because the stocks that you will pick in the beginning may not be the best stocks, in such a case you will have less loss. The less your capital is, the lesser will be your loss. If you have a loss, do not panic, see why I have suffered a loss, when you have a loss and the research you do at that time, that is your real research. The more you focus on learning, the more money you will be able to earn from Stock Market. To learn Stock Market you should read books. Best Stock Market Books which can clear your Stock Market Basics.

Rich Dad Poor Dad = This book will teach you how to manage money. This book will teach you everything about personal finance. After reading this book, you will understand the stock market basics very well. This book will change your way of thinking and understanding. You must read this book.

Learn to Earn by Peter Lynch: This book will strengthen your stock market basics very well. If you are starting investing, then you must read this book in the beginning.

What is a portfolio? How to create it?

In the beginning, most people make the mistake of investing all their money in 1 or 2 stocks. They are not aware how dangerous this game is. You should keep 10 to 18 stocks in your portfolio, invest at least 4% of your total capital and maximum 8% in one stock. And do not invest 8% money at once, invest it gradually. You should have at least 5-6 sectors in your portfolio. You should invest some of your money in gold. And some money should be invested in mutual funds. And the more you clear the stock market basics the better it is for you.

Stay away from Intraday and Penny Stocks.

When most people enter the Stock Market, they have less money and they should start with less money. In such a situation, they are more attracted towards Intraday Trading and Penny Stock. But people who have clear Stock Market Basics don’t do this.

Intraday Trading = They think that if we want to earn quick money from Stock Market, then we can earn quick money only through Intraday Trading. But this doesn’t happen, and quick money cannot be earned from Stock Market. If you want to earn money from Stock Market for a long time, then you have to make Long-Term Investment, meaning the share you have bought, you should hold it for a long time so that the share can show you the power of compounding.

Penny Stocks = Penny Stocks are those stocks whose price is ₹1, ₹2, ₹5. Due to people having less money, they think that if we buy 5000 shares of ₹ 5000, then if this stock goes from ₹ 1 to ₹ 2, then our capital will double. But this does not happen, if that stock was so good then you would not have got it at the price of ₹ 1, ₹ 2. And operators are also active in these, in such a situation you can have a big loss. That is why you should stay away from Penny Stock.

How to choose quality stock?

Most of the investors feel that stock picking is a very hard job. But this is not so at all, the simpler investing is kept the better it is. The easiest way to pick a quality stock is to observe the people around you which product most of the people use. For example, which company’s AC = Air Conditioner do they use. Which company’s soap, surf do they use. And you also need to see which company’s product is sold the most at medical stores. Which company’s product is sold the most at grocery stores. And then you should know a little about that company’s business. In this way you can pick a good and quality stock.

How to reduce risk in stock market?

There is risk along with profit in the stock market. The market sometimes goes up and sometimes comes down. You should not panic because of this. All these things keep happening in the market. Many people get scared seeing the volatility of the market. And then they sell the shares in a hurry. But you should not do this. These things happen in the market every day. If you want to reduce your risk in the market, then you should make long-term investment. But in the beginning you do not have to make long-term investment. When you have a good understanding about the market, then you have to make long-term investment.

Conclusion: Understanding Stock Market Basics is the first step of your financial journey. If you start investing with the right planning and knowledge, then you can earn good money in the long term. And to read such educational blog posts, definitely subscribe to our website = kaifinvestor.com

Stock Market Basics = It means absolutely basic information about the share market.

Thank you for reading this blog post.