Investing in the stock market is a great way to grow your wealth.Many people think investing is difficult, but with a little knowledge and practice anyone can start. In this blog, I will explain the basic steps How to Invest Money in the Share Market in India in a simple and easy way, especially for students and beginners.
If you’re in Class 8 or Class 10 and want to learn how to invest, this guide is just for you! By the end of this blog, you will understand how the share market works, how to open an account, and how to start investing your money.
What is the Share Market?
The share market (or stock market) is where people buy and sell parts of companies, called shares. When you buy a share you become a part-owner of that company. The more shares you buy, the larger your ownership. For example, if you buy one share of Reliance Industries or Tata Motors, you own a small part of that company.
There are 2 major stock exchanges in India:
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
These are places where most of the buying and selling of shares happen. Companies like Tata, Reliance, HDFC, Infosys, etc., are listed on these exchanges.
Why Should You Invest in Shares?
People invest in shares because over time, they expect their money to grow. When the company performs well and makes a profit, the value of its shares goes up. For example, if you buy a share at ₹100 today, and in a few months, it rises to ₹150, you’ve made a ₹50 profit.
This is the simplest way to make money in the stock market — buy shares at a lower price and sell them when the price goes higher.
Another benefit of investing in shares is dividends. Some companies give a part of their profit to their shareholders. This is called a dividend, and it is extra money that you get if you hold shares in that company.
Steps to Start Investing in the Share Market
1. Learn the Basics of Stock Market
Before you invest your money, it’s important to understand the basics of how the stock market works. Read about stocks, shares, and risks. Watch videos on YouTube or talk to someone experienced. Having knowledge about what you’re doing will help you make better decisions.
2. Open a Demat and Trading Account
To buy and sell shares, you need two types of accounts:
Demat Account: This account holds your shares, just like a bank account holds your money.
Trading Account: This is where you place buy or sell orders to trade in the stock market.
Here’s a suggestion: You can easily open a Demat and Trading Account through Angel One, one of the most trusted and user-friendly platforms. They provide an easy way to open your account online in a few steps.
Click here to open a Demat account with Angel One!
After opening your Demat account, you can begin investing from your mobile or computer.
3. Research and Choose Companies
Before you invest, do some research about companies. You want to invest in companies that are doing well and have good future prospects. This means companies that are making profits and growing over time.
A good way to start is by looking at large, well-known companies like:
Tata Group
HDFC Bank
Reliance Industries
Infosys
These companies are less risky because they have been in business for a long time and are more stable.
4. Start Small
As a beginner, don’t invest too much money at once. Start with a small amount that you are comfortable with, even if it is just ₹1,000 or ₹5,000. This way, you can learn how the stock market works without taking big risks.
Let’s say you saved ₹2,000 from your pocket money. You can buy one or two shares of a company with this money and watch how the price of those shares changes over time. This will give you experience without risking a lot.
5. Buy Shares
Once you have a Demat and Trading account and have chosen a company to invest in, you can buy your first share. This is how you do it:
Log in to your Angel One app.
Search for the company you want to invest in.
Enter the number of shares you want to buy and the price you want to buy them at.
Place your order.
For example, if you decide to buy one share of Tata Motors, you will enter the details and place an order. Once your order is completed, the share will be added to your Demat Account.
Simple Example of Investing in Shares
Suppose you have saved ₹1,000 from your pocket money, and you want to invest this money. Here’s how you can do it step by step:
3.Buy Shares: The price of one Tata Motors share is ₹250. With ₹1,000, you can buy 4 shares (₹250 x 4 = ₹1,000).
4.Hold the Shares: You wait for six months, and after six months, the price of Tata Motors shares increases to ₹300.
5.Sell the Shares: You sell your 4 shares at ₹300 each. So, you get ₹1,200 (₹300 x 4). Your profit is ₹200 (₹1,200 – ₹1,000).
This is how easy investing in the stock market can be!
Benefits of Investing in the Stock Market
2.Dividends: As mentioned earlier, some companies pay dividends, which is like an extra income for holding their shares.
3.Liquidity: Shares are easy to buy and sell. If you need money quickly, you can sell your shares and get your money back in just a few days.
Important Tips for Stock Market Beginners
2.Invest for the Long Term: The stock market goes up and down daily. Don’t panic if the price of a share falls. In the long term, good companies usually grow in value. For example, companies like Tata or Reliance have seen their share prices rise over many years.
3.Diversify your portfolio: and don’t put all your money in one company.Spread your money across different companies and industries. This way, if one company doesn’t do well, you still have other investments that might perform better.
4.Start Small: As a beginner, don’t invest a lot of money at once. Start with a small amount and increase your investments as you gain more experience.
5.Avoid Day Trading: Day trading, or buying and selling shares in one day, can be very risky. For beginners, it’s better to invest for the long term.
Risks of Stock Market Investing
This is why it’s important to research before investing and only invest money you are willing to risk.
Conclusion
Investing in the stock market can be a great way to grow your wealth, even if you are a student. With the right knowledge and strategy, you can start small and learn how the stock market works. By using platforms like Angel One, you can open a Demat Account and start your investment journey today.
Remember:
Learn the basics.
Start small.
Invest for the long term.
Diversify your investments.
Follow these steps, and over time, you can become a smart investor and grow your wealth.
Open your Demat account with Angel One now! and begin your stock market journey today!
