Everyone wants to save their money for their future generation,they do each n every things to save the money,but have anyone ever tried to invest their money rather than to save it.
Instead of saving money,one should invest it in such place/platform from where they can earn profit.
Yes,you are thinking right…I am going to talk about Investment of money.And this time i will mainly focus on Investment of money in Stock Market.
DIFFERENCE BETWEEN SAVING AND INVESTMENT:-
Saving:In laymen language, saving means INCOME-EXPENDITURE=SAVING.Means the leftover income after overall expenditure.People generally kept their money in theirselves for their future needs.So, the that money kept idol.
Investment: When people save their money and wanted to earn extra benefit from it,then they started to invest that money in Mutual Funds,Gold,Real Estate,Fixed Deposit,Equity Shares etc.So, by investing money they earn a return monthly or yearly as per their investment time.That some of money in return is known as INTEREST.So,only saving is not beneficial,one should invest them further.
NOW,DO YOU KNOW WHAT STOCK MARKET IS??
Definition: It is a place where shares of pubic listed companies are traded. The primary market is where companies float shares to the general public in an initial public offering (IPO) to raise capital.
Description: Once new securities have been sold in the primary market, they are traded in the secondary market—where one investor buys shares from another investor at the prevailing market price or at whatever price both the buyer and seller agree upon. The secondary market or the stock exchanges are regulated by the regulatory authority. In India, the secondary and primary markets are governed by the Security and Exchange Board of India (SEBI).
What Stock Market Index Is?
There are around 5000 companies in the Bombay Stock Exchange and around 1600 companies on the National Stock Exchange. So if I ask you, how is the stock market doing today? You’re not going to check the share price of each and every company.You will pick a few major companies across key sectors and check their status. And if the majority of their status is going up, then you will say that the stock market is up. But if a majority of their stock prices are down, you will say that the stock market is also down.
Now, these few major companies that you use to determine the health of the stock market form the stock market index. In India, we have two major indexes, Sensex and Nifty.
Sensex has been major 30 companies from the Bombay Stock Exchange and Nifty have 50 major companies from the National Stock Exchange. Some of these companies include TCS Ltd, Tata Motors Ltd, Asian Paints Ltd, ITC Ltd, so on and so forth, The reason why we need an index because it is a barometer for comparing any creating or investing activity.
For example, let’s assume that last year you have invested one Lakh rupees and generated a return of 20000 rupees, which means that now you have 1,20,000 rupees, which is 20 percent return, which is great.
But what if last year nifty move from 9000 points to 11700 points, generating a 30 percent return. Now you’re 20% does not look so good, because you have underperformed the index. And index acts as a barometer for every trader and investor because the intention is to outperform the index. Plus, a stock market index acts as a barometer for a country’s economy.
After knowing What stock market & stock index is, It’s time to go further to know, what is difference between Investing and trading?
Investment:-To invest is to allocate money in the expectation of some benefit/return in the future. In other words, to invest means owning an asset or an item with the goal of generating income from the investment or the appreciation of your investment which is an increase in the value of the asset over a period of time.
Trading:-Stock trading involves buying and selling stocks frequently in an attempt to time the market. The goal of stock traders is to capitalize on short-term market events to sell stocks for a profit, or buy stocks at a low. Some stock traders are day traders, which means they buy and sell several times throughout the day.
So, Let’s get further towards the main topic, How to Invest in Stock Market?The steps are given below:-
- Decide how you want to invest in the stock market
There are several ways to approach stock investing. Choose the option below that best represents how you want to invest, and how hands-on you’d like to be in picking and choosing the stocks you invest in.
A. “I’d like to choose stocks and stock funds on my own.” Keep reading; this article breaks down things hands-on investors need to know, including how to choose the right account for your needs and how to compare stock investments.
B. “I’d like an expert to manage the process for me.” You may be a good candidate for a robo-advisor, a service that offers low-cost investment management. Virtually all of the major brokerage firms offer these services, which invest your money for you based on your specific goals.
C. “I’d like to start investing in my employer’s 401(k).” This is one of the most common ways for beginners to start investing. In many ways, it teaches new investors some of the most proven investing methods: making small contributions on a regular basis, focusing on the long-term and taking a hands-off approach.
- Choose an investing account
Generally speaking, to invest in stocks, you need an investment account. For the hands-on types, this usually means a brokerage account. For those who would like a little help, opening an account through a robo-advisor is a sensible option. We break down both processes below.
An important point: Both brokers and robo-advisors allow you to open an account with very little money.
THE DIY OPTION: OPENING A BROKERAGE ACCOUNT
An online brokerage account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. With a broker, you can open an individual retirement account, also known as an IRA, or you can open a taxable brokerage account if you’re already saving adequately for retirement in an employer 401(k) or other plan.
We have a guide to opening a brokerage account if you need a deep dive. You’ll want to evaluate brokers based on factors like costs (trading commissions, account fees), investment selection (look for a good selection of commission-free ETFs if you favor funds) and investor research and tools.
SO,these are the few steps by which you can learn how to invest in Stock Market,the rest steps and explanation will be in the next blog.
STAY STUNNED!KEEP LEARNING!
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