Ever wondered why do people invest in stock? What is so good about investment?
Is it really just about risking your money as the stereotypes suggest?
And who are these people investing their hard-earned money into an uncertain market?
To know the answers, we need to know what investment is?
Investment is allocating assets (basically money in other forms) to generate future returns. People invest in stock to achieve their financial goals or for long-term spur in income.
People who learn money, educate themselves on the instruments of money are well aware with the benefits of investment.
In India, SEBI is the regulating body for share market. There are two platforms in India where you can trade- Bombay Stock Exchange and National Stock Exchange.
Now who can invest in stocks?
There is no age limit for investing in stock. However, you need a demat account to operate in share market.
This implies that you must have a pan card which cannot be attained before 18 years of age.
In fact, students can invest in stock market as well. However, since they can’t open a demat account yet, they will need to register on their guardian’s papers to invest in the stock market.
Can NRI invest in Indian stock market?
The portfolio investment scheme (PIS) introduced by RBI allows certain foreigners as NRIs or people of Indian origin to trade in Indian stock market.
They need to have a NRE, NRO and a FIRC account to get into Indian stock market. There is no other hard fast rules for NRIs to invest in Indian stock market. However, the trading and investment can only be done in rupee currency.
How much can I invest in stocks?
You can invest any amount in the market. It can be as low as 10 rupees and as high as you can invest. This makes stock market a very flexible platform.
Anyone with a goal, enough knowledge and little money can start to invest in stocks.
How to invest in stock market?
The first thing you need to do is to open a demat account.
A demat account is an electronics medium that hold shares and securities of an investor. Demat account can be opened by the help of a broking agency or NSDL or CDSL.
There are even some banks that help people open demat account and invest.
Next, you will need a broker to invest in the stock market.
Brokers are like agents who are SEBI certified and help to manage your demat account. They guide you on the types of stocks and funds you should invest in.
Investing should be a regular habit. Even though you are making small investments, it should be done regularly. This process ensures a healthy grip on your future income.
You should be able to take risk and manage it as well. You should know how much you risk you can expose your money to.
Being aggressive can cost you dejection. However, good judgement and learning with experience can help you attain good results.
Investing in a mutual fund with a systematic investment plan (SIP) is considered one of the best options today.
It is a long-term investing plan. And if done with a regular habit, it builds great wealth.
This plan has numbers of securities to invest in and can be started with an investment of as low as Rs.500.
The bottom line
Stock market is a big platform to invest and earn high returns.
There are risks, but good judgement can help you maintain your investment and incur high returns as well.
Anyone with a demat account in India can invest in stock market. Some foreigners as NRI and PIO can invest in Indian stock market as well.
Therefore, stock market is a flexible platform that can help you receive high returns for your future.