As the saying goes, ‘The right start is half job done’ holds quite true even when it comes to investing in stock market. Not everyone who invests in stocks is sure of what he wants and how he would achieve it and thus not everyone makes better profits out of stock market investment. If you are a beginner, you need to be planned and well versed with things associated with stock market investment. Following is a step-by-step brief guideline for beginners.
Pan card is a must
Permanent Account Number (PAN) is the basic requirement if you want to trade in stocks, along with being a mandatory requirement for carrying out any financial transactions in the country. PAN card, a 10 digit number is issued by the government for assessing tax liabilities. If you don’t have it yet, get a PAN in the first place.
Hire a broker/agent
Stocks are not like any other thing which could be bought or sold directly by any individual. If you want to trade in stock market, you would need a broker in all circumstances. They are authorized by SEBI to buy or sell in the stock markets and you would need to get started with them.
Brokers could be an individual, a company or an online service provider. Depending on your level of comfort and requirement, you can hire any one of them. The only thing that you should take care while hiring a broker is that they should be reputed and reliable enough for you to depend upon them.
Open a Demat account and a trading account
After you have hired a broker, the next thing you need to do is open a Demat account. It is a type of account opened by most of the bank and is a channel through which you can invest and receive money while trading stocks. It stores the shares that you buy from stock market and holds those shares in your name. Another thing that you would need is a trading account through which the buying and selling would happen for you. Demat and trading accounts are interrelated and are often opened by the banks simultaneously.
Although, your broker would be able to take care of this, yet, you should know a little about depository participant. NSDL and CDSL are two depository participants in India and in order to deal in stocks, you need to have an account here as well. But don’t worry; your broker will get this done for you.
Moreover, if you want to trade for more than Rs. 1,00,000 in one go, you would also need UIN, which is Unique Identification Number. You may consult your broker regarding this.
So, get the above things in place and you are all set to buy and sell in stock market. Your broker would be your ally and friend in guiding you through the entire process. Nevertheless, you yourself need to keep researching diligently for the shares you would want to buy or sell once you start trading.