Disciplined investments in the stock market can help in supplementing your income and help you in working from anywhere you want. Here, we will discuss some important pointers that you should know about before you start investing in the stock market.
Documents Required for Investing In Stock Markets
To invest money in the stock markets, you first need to submit the following documents:
- PAN card
- Aadhaar Card
- A canceled cheque from your bank account
- Proof of residence
- Your salary or income documents
- Your passport size photographs
Demat Account
A Demat Account is the one that holds the shares in the name of the account holder. This account acts as an electronic house for the shares. These are opened online through a depository participant. You can avail of these services from your banks too. The process of opening a Demat account is hassle-free and be done in a matter of a few minutes from the comfort of your own homes.
Trading Account
A trading account and Demat account go hand in hand. Demat in Demat account refers to the term ‘dematerialized’. This refers to the digital nature of the shares. Trading accounts are the accounts through which buy and sell stocks in the stock market. No investments can be done in the share market without both tradings as well as Demat account. Most of the good-quality stocks are available on the Bombay Stock Exchange and National Stock Exchange. However, certain stocks are available only on one of the two exchanges. To trade both on NSE and BSE, it is best to open a Demat account that acts as a depository participant for both.
Difference Between Trading And Investing
After the submission of all the documents, all the details are cross-checked and login details are provided to you. Log into your account and start trading. There are two mains strategies for you to choose- investing and trading. Trading refers to making profits from short-term market fluctuations. It is mainly for the intraday traders who clear off all their positions at the end of the day. Here large and voluminous positions are taken and sold off at the slightest of market fluctuations. On the contrary, investing refers to holding stock positions for a long time. Investing is done to buy undervalued stocks and maintain them through the temporary ups and downs of the market.
Conclusion Though stock markets are considered to be a lucrative way of making easy money, investing in the same should be done with appropriate care and strategy. By keeping these basic principles of investing and trading in mind, you are sure to make a successful foray into the stock market. To get more information and tips regarding stock markets, subscribe to our newsletter for expert advice.
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