How to invest in stock market in India (2024)

Ways to Invest in the Stock Market

There are two ways to invest your money in stock markets – either via capital appreciation or through dividends earned. People invest in shares primarily, hoping to gain from share price appreciation. The gains or profit from increasing share prices can go very high under the right circ*mstances. Yet, this is not guaranteed. If the company performs poorly, then a price drop is always possible. That is why you need to be sure of the company you are investing in.

The other way to get returns from stock market investments is through dividends. Many companies distribute the whole or a part of the profit they make to shareholders in dividends. If you hold many shares in dividend distributing companies, you can earn good money.

Trading Tips to Maximise Returns From Stock Market Investing

1. Identify the Kind of Trading or Investing You Want to Do

You can either trade or invest in equities in the stock market. Trading is the short-term buying or selling of shares. Traders use technical analysis to trade in shares. If you want to invest in the long term, you need to use fundamental analysis. The first step should be to identify whether you want to do intraday trading or invest in the long term.

2. Do Your Research

Whether you are trading or investing in stocks, you need to ensure that you have researched the companies you want to put your money on. Even if you are trading in the short term, a company's fundamentals need to be strong if you're going to make a profit. Combining technical and fundamental analysis can help you pick the right stocks.

3. Don't Try to Time the Market

Buying at a low price and selling high sounds like the perfect stock market strategy. However, it isn't possible to know the bottom or peak of a stock. Instead of trying to time the market, focus on buying stocks that show value.

4. Build a Diversified Portfolio

Putting all your money in one or two stocks may cost you your capital if they tank. As all financial advice goes, try and build a diversified portfolio of stocks across industries. This way, if some stocks underperform, the others may outperform and balance out the losses in your portfolio.

5. Keep Emotions at Bay

Fear and greed can cloud your judgment regarding stock market trading or investing. When prices of a stock fall, you may be tempted to sell. When prices fall below a certain level, you may want to buy in bulk. However, this may not be the right decision. Instead, focus on looking for the value of the company. Have a disciplined approach to buying and selling.

6. Avoid Herd Mentality

Many times, people base their decision to buy or sell a stock depending on advice from peers or recommendations from others. If the general market trend seems to be investing in a particular stock, they may buy that too. However, the markets could be wrong. Never trust anyone else's judgement. Do your research before you buy or sell a stock.

Final Word

Stock market investing is not rocket science, but it does require some skill and effort. You can successfully invest in stock markets with the right strategies under your belt and an excellent brokerage to provide support.

ICICI Direct's online trading account provides numerous benefits and attractive brokerage plans that make it an ideal partner for anyone interested in dipping their toes into the stock market. You can open a demat account with ICICI Direct in easy steps, and the 3-in-1 savings, trading and demat account ensure that all your transactions are hassle-free. You can also use the share market app app to trade in equities.

Disclaimer:

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and has SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in the securities market is subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Brokerage shall not exceed SEBI prescribed limit.

The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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Updated: 11 Apr 2022, 02:56 PM IST