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Suruchi Bhargava


Things You Need to Know Before Investing in the Indian Stock Market

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5 months ago
5 months ago
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Sometimes not taking any risk is the biggest risk but if you are willing to go ahead and take that chance, this article is for you. Successful stock investment is all about buy low and sell high. The rise and fall of stock prices is an enigma that is not just exciting but makes a great investment too. When we think about stock market, a chaotic image comes in our mind but thanks to computer technology, the process is seamless and plain sailing. Here’s what you need to know before making your first investment-

Know the Stock Market

Trading in India mostly takes place on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Bombay Stock Exchange is the oldest stock exchange in Asia, established in 1875 while NSE was established in 1992. The Indian stock market is regulated by SEBI (Securities and Exchange Board of India).

Know the trading mechanism of the stock exchange of your interest. To provide more transparency, the buyers and sellers remain anonymous in the Indian stock market. The regular trading session is from 9:15 am to 3:30 pm for 5 days (Monday to Friday).

Get Familiar with stocks

Before you make money with stocks, you have to understand them. Get familiar with the Filings of your country. In India, for example, you can check it on Corporate Fillings and Dissemination System, MoneyControl, etc. You can also check the official website of Securities and Exchange Board of India to get more familiar and accustomed to stocks and to keep yourself updated in the stock market domain. The two distinguished Indian market indices are BSE Sensex and Nifty.

Invest for long term

Stocks for long terms mostly prove to be advantageous. There is no surety in life about anything and it holds true in the case of stocks as well but long term investments boost your chances for success. Know the merit of your stock. Look at the bigger picture. Dividend paying stocks are a good option too. Dividend is the money paid by a company to its shareholders on a regular basis and the amount depends on profit earned by the company.

The right stock and the right time

Research well about which stocks to buy. This will help you pick the right stock. It’s advised to buy the stock you know about or else you can go ahead with the annual reports and price-earnings ratio, earnings growth etc. Also once you know which stock to buy, don’t rush. It’s the game of patience. Wait for the best time to invest. Observe the stock price and buy when it’s down to make more profit. This is how you buy low and sell overweight.

As per 2017, only 4 percent Indians invest in stock market and less than 1.5 in Mutual Funds which is almost same as it was two decades ago. Prices of oil and consumer goods keep hiking but people are extremely wary of stocks getting cheaper. Stocks are beneficial investments especially in the long term. The less participation of people in India is mostly because of myths when it comes to investment, lack of awareness and guidance, etc, even when we know stocks offer gargantuan potential for growth.

Price is what you pay. Value is what you get. ~ Warren Buffett

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