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Today share market is getting massive popularity amongst people. Most of the people take share market as a primary source of income, and some make it as a secondary source of income. Everyone is fascinated about share markets and wants to know leverages of getting into it. Here in this article, we are going to discuss how to invest in the share markets for beginners.

How to invest money in share market? This question is always raised in an individual mind when it comes to investing real money. If you are going to indulge in the share market should have a valid perspective, if not yet, then find. Because it is a matter of money and for just fun, no one wants to lose money. However, the share market is an excellent way of income, but doing bad practice can lose your hard-earned money. So if you are a beginner, then you should read some important things before getting into it.

Let's have a look at how to invest in share market for beginners guide:

There are few things than you should know before you invest in the share market if you are a beginner. A traditional way is getting started is opening a Demat and trading account. Below are documents mentioned you need to open a Demat account online and quickly are-

Bank account- you must need a bank account where all your money gets transferred. This account should be linked to your trading account.

Adhar- it is a must-have thing to open a Demat account in India as it is a primary source of identification. The KYC process is required to complete the account opening process as it is wholly based in Adhar.

PAN card- also, you need a PAN (permanent account number). For your name and date confirmation, your mentioned PAN card is suggested. In India, a PAN card is a must for financial transactions.

Broker- it works as an intermediate between investor and stock exchange. The trade-in share market is done through a broker as he facilitates communication between buyer and seller. So it is essential to open a Demat account.

Personalized cheque and Bank statement- while opening an account, you need your bank statement and personalized cheque. After confirmation of credentials, your Demat account will be open within minutes. This process of account opening will take only a few minutes, so you can start investing in the share market.

Now let's learn how to invest money in share market:

· Make clearly defined goals for investments

· Take professionals or expert advice before getting into it

· Keep patience before doing anything

· Don’t take any decision instantly

· Don’t believe in rumours

· Start investing regularly from starting for significant leverages

· Set the financial assets based on your goals and timelines

· Think before investing in any trade

· Most importantly you should have a regular source of income

So by reading the above-mentioned points probably, you would get your answer about how to invest in the share market.

Now moving on, see the how to invest in share market in India.

Step by step guide how to invest in share market in India:

According to a famous American financier and philanthropist, Mr George F. Baker -To make money in stocks, you must have the visualization ability to see them and enough guts to buy them, and the patience to hold them.

Factually, there are thousands of companies authorized by NSE (Nifty) and BSE (Sensex), and unless you are knowledgeable enough to filter which company is going to earn more and which are going lost in the sea.

The investing guide which we are going to share with you is the one which is followed and used by us. Investing money is an ocean in itself, and before investing, people who are investing has to go through a dreary process of analyzing stocks by reading through the financial statements, annual reports, and other different reports containing the financial wealth of a company.

However, based on our past experiences of investing in the share market, we have come with following simple steps that you can follow to kick start your share marketing journey, even without having broad financial knowledge.

#1 screening and filtering the right stocks using financials

There are a bunch of stocks listed on the NSE and BSE. And it is impossible to analyze each of them by going through financial details. Therefor initial consideration you can use the pre-planned screening criteria to find out the stocks that are fundamentally strong.

Screening criteria-

· The market cap should be higher than Rs 500Cr

· Sales and profit should more significant than 10%

· For the past five years, EPS (earning per square) growth rate should be increasing

· Debt to equity ratio should be less than 1

· Return to equity should more significant than 20%

· Price to book value less or equal than 1.5

· Price o earning should less than 25

· The current ration should greater than 1

Besides, you can quickly check the financial information online as there are many screener tools available online financial platforms where you can get information within minutes. Also, you can check the other financial ratios by clicking the company factsheet.

#2 Select companies that you understand

After step 1, you have filtered out stocks with good fundamentals, now you have to learn more about these stocks by you have read about the company which they are underlying. For this simply, you can visit the official website of the company and even track the updates of the company on social media platforms or search for the company on search engines and get feedback from past investors.

Mainly there are only three questions that will help you to understand the company business.

· Do I understand the company offered a product or service?

· Do I understand how company business works and make money?

· What of business it has?

It is foremost thing you to do before investing in companies, at least you have some initial information about the company. Doing this, you can ensure your money is not going waste.

If you have significant work experience in the IT field and you are passionate about technology and aware of the latest market trends, then this will going to give you more advantages. By knowing above, you can understand business easily and reasons for growth. You can easily predict how the future could turn out to be the company. However, there are many businesses too where no particular background is required, such as consumer products.

#3 Search companies with a sustainable moat

The only test of financial numbers cannot identify the company; there are many other business models to understand one of them is the moat. It is the competitive advantage of the company over the competitor company in the same sector. The high moat means immense competitive advantage and high sustainability of the company.

#4 Look for low debts

High debt levels can cause significant risks to the company. Apart from screening criteria where debt to equity ratio and current ratio is used to filter the stocks, the ratio of these shows how the company is dependent and debt to fund its growth. So while selecting the stocks, look whether the company handling its debt over the past many years.

#5 Use financial ratios RoE and RoCE to find the right stocks

RoCE is the primary measures of a company how it uses all available capital to generate additional profits. Considering these two financial ratios put together with help in understanding:

· How efficiently the company is using resources?

· How much profit it earns in terms of investments?

A company with high ROE and RoCE has a great chance for future growth in the value of the company.

#6 Transparent, Honest, competent management

One of the primary reasons why people quit trading in the stock market is management fraud with their savings; in the past, there have been many cases where many companies did accounting frauds, misled shareholders, and did shad deals that can cause a lot of monetary loss to investors. So there are a few points you need to check before choosing any company.

· Read company annual report

· Look out for promoter’s shareholding

· See whether any fraud is done by the company in the past

#7 Right prices for buying the stock

Eureka!

If you have reached this step that means you narrowed down some essential aspects of the share market. The only question that remains is how to invest money share market? The answer is found maximum value company by investing a minimum price. No matter how the company good is, paying a hefty amount for the future cannot assure that it can grow as per expectation. So invest an amount as per the worth of the company.

These are the steps on how to invest in shares for beginners. Importantly, you don’t have to be a finance or MBA degree holder to invest in the share market. Some of the most prominent investors across the world come from a very normal academic background.

Hopefully, this how to share in share market for beginner guide can teach you some important factors of share market so that you can kick start with it.

Investing in the share market will give you high returns for the investment. However, there are a variety of products you can choose from. As per your requirements and goals, you can set the short or long term investment in the share market.

Let's have a look at those reasons to invest in the share market:

Passive source of income

According to some famous investors in this field, an average person should have at least three-income sources at a time to become rich. Many people dream of earning money without going anywhere, even without too many complications. The share market makes it possible for those peoples so they can create a great source of income without actually making physical efforts.

However, you need to do is some basic analysis, qualitative analysis, technical analysis, turnover of a company where you are going to invest in, so you can carry out the investment for the long term. Undoubtedly, investing in these companies will give you get significant leverage. So for long term profits start doing a study of such kinds of companies so you can make good profits via investing in the share market.

Not any special skills are required to invest in the share market

Even if you are a metric pass and have basic knowledge of maths, you can easily understand how to invest in the share market and how it works. All you need to do is to find a significant space where you can get better returns. For this, you can do some fundamental analysis like companies' profit and loss values, technical analysis, balance sheet, and qualitative analysis. Tip- you need to spend on the in big companies those turnovers are higher, investing in these companies you are going to earn some good profits.

The great second source of income

A common man who is doing 9 to 5 job has done work hard to secure his life and future. He has stuck to the job and continues to do so for his entire life. Not only, he has to compromise with his ambition, but there is always a chance of kicked out from the. For these types of peoples share market is not less than a jackpot, so they can create a great source of income by investing in a share market where profits are higher. By investing a small amount in the share market, they can easily create a second source of income.

You can invest a small amount in the share market

It is a complete myth than the share market is for rich or business persons; a common man can’t bear the expenses of share markets. Today any nearly spend at least Rs 1000 in the week over restaurants, shopping, or anything else. For sure, you can skip this expense in a month, and from this money, you can start investing in share markets, and if you continue this in the rest 30 years, you will get Rs 46 Lakhs.

No time bounds

Unlike provident funds, which has 15 years of lock-in period or national savings certificate, which has five years of the lock-in period, the share market does not have any time bounds. Thus you don’t have any time frame for buying or selling the shares. Even you can sell your stocks as much you want or sell it just after a minute after buying, it depends on you.

After knowing how to invest in the share market in India, you should know some uncover aspects of share market. Investing in the share market is not always more comfortable. In the current scenario, you can start investing in the share market while just sitting from your home. To do that, only you need some crucial credentials like Email address, PAN, ID proof, account number, internet connection, and PC.

Many of the online sourced brokers and mutual fund services offer a one-hour activation of the Demat account. For this, you need to visit the official website of a stockbroker or mutual fund house and fill up the required credentials. If you passed the verification process, your account will be activated within 24 hours; after that, you are free to invest anywhere as much amount you want to spend.

Decide how to invest in the shares?

There plenty of ways to approach share investing. Choose the option listed below that suits your requirements on how to invest in the shares on how hands you prefer to pick or choose stock where you are going to spend.

Ø Do it yourself or choosing shares for yourself- keep this mind if you are experienced, then there is no issue you can pick trades with your own. But if you are a novice in this sector, then DIY is a bad idea for you. A well-experienced person only knows where and when and how much to trade and this experience will only come after spending years on the share market.

Ø Take advice from professionals- taking information for professionals is not a bad idea, as it is a matter of money. Importantly don’t believe in the rumours available on the internet. Think twice then after going for further steps.

Hope after reading this article you got a clear idea of how to invest money in the share market and your questions about how to invest in the share market in India. So get going! Chose your broker today and open a Demat account and start investing in the share market.

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