How to invest in share market in India for beginners - STP (2023)

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We all save money. If the income of some people is high, then those people are successful in saving more money, but if the income of some people is less then they can save less money. But there is only one problem in front of everyone that where to invest their money. From where they can earn good returns. By the way, many people know about the share market, but there is a fear in the minds of many people about the share market that the share market is a gamble. Some people still believe that if they invest in the stock market, then their money can be wasted. That’s why they do not want to invest in the share market. The biggest reason for this fear is that they do not even know about the stock market. They do not know how the stock market works.

Today I will try to answer the questions of all the share market beginners through this article. And today we will know that if you are a beginner in the share market then how can you invest in the share market.

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If you want to invest in the stock market, then you cannot invest in the share market through your bank account. For this, you have to create a Demat account in NSE or BSE. There are many such apps available through which you can open a new Demat account. But I will tell you about two such apps which are used the most in India.

  1. Zerodha
  2. ICICI Direct

By the way, I use both these apps only. But out of these Zerodha is a user-friendly app. Even if you are a beginner, you can easily use this app. So first you have to create an account in the Zerodha app. And when your account is verified, you can buy and sell shares directly from NSE or BSE stock exchange.

How do I open an account online in Zerodha?

First, you have to install the Zerodha app on your phone.

Follow the simple on-screen instructions to open an account. You will be required to enter your Real Name, Email, PAN, bank account details, and personal details to continue with the sign-up.

And after that, your account will be verified. If everything goes well then your Demat account will be opened within 24 hours. So in this way you can open a Demat account and invest in the share market.

If to be honest, the stock market will not give fixed returns like bank RD and FD. But the shares of those banks in which your money is deposited are also available in the share market and they give more return than the FD and RD. For example, suppose that your account is in HDFC Bank and you have kept all the money in the FD account of HDFC Bank. So in 2021, you will get a maximum of 5% interest on the FD account.

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And below I am sharing the performance chart of HDFC Bank stock. You can check how much return you would have earned if you had invested money in HDFC Bank stock instead of HDFC Bank FD.

How to invest in share market in India for beginners - STP (1)

So you can see in the graph itself that the share of HDFC Bank has given a return of about 12,186.40%. If you had invested in HDFC Bank shares even five years ago, you would have got a return of about 97.65%. Meaning you will get about a 20% return in a year.

But as you know, the more profit there is in the stock market, the more risk there is. Beginners do not know which stock to invest in. Many times they want to invest in such stocks whose price is low. They do not see the balance sheet of the company, they only see the share price. And think that 1 rupee share can reach 10 rupees soon. But it doesn’t happen. So if you are new in the share market then, first of all, you should know about the share market. You will find many videos about it on YouTube. And on our blog also you will find many articles about the share market. By reading which you will know more about the stock market.

Best stocks to Invest for beginners

If you are new in the market then you should invest in such stocks which are fundamentally strong. Some stocks have been performing consistently for the last several years. You can invest in such stocks. First of all, in whichever stock you want to invest in, it is important to check its performance first. After that, you have to see how much the Total asset is with the company. And how much debt does the company have? If the debt on the company is increasing continuously, then you should invest in the stock wisely. You should also check whether the profit of the company is increasing or decreasing.

But if you are a beginner in the world of the share market, then you may have to face difficulty in checking all this. But slowly you will learn everything.

Below I am going to tell you about some such stocks in which you can invest. But this is just an opinion. You should also know about the stocks yourself.

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  1. HDFC Bank
  2. ICICI Bank
  3. Relaxo
  4. Tata Consultancy Services (TCS)
  5. Infosys
  6. Wipro
  7. Hindustan Unilever (HUL)
  8. P&G
  9. Bajaj Finance
  10. Bajaj Finserv
  11. Reliance Industries
  12. State Bank of India (SBI)
  13. Pidilite
  14. Asian paints
  15. Deepak Nitrite

These are some of the stocks in which you can invest. And you can hold these stocks for the long term also. You can get good returns from these stocks in the long run. But as I said earlier this is just an opinion. Before investing in any stock, you should collect complete information about the stock. And only then you should invest.

Is Mutual Funds good for beginners

Yes if you don’t have much knowledge about the stock market. And if you want to invest your money safely, then Mutual Funds are a good option for you. Even in mutual funds, your money will be invested in the share market itself. But you don’t need to do anything. In mutual funds, the person who is the manager of the mutual fund company invests your money in good stocks according to him. And they invest your money in such stocks from where you can get good returns. You don’t even need to keep an eye on the market. You can invest in mutual funds every month through SIP.

If you invest in the direct share market, then the risk factor increases in it. But when you invest in Mutual Funds, your money is invested by the company and you can expect good returns. In Mutual Funds also you can invest in both equity and debt funds. Equity funds can get higher returns than debt funds but equity funds also carry higher risk.

You should add both debt funds and equity funds to your portfolio. So below I am going to tell you about some good mutual funds in which you can invest.

Axis Blue-chip fund
Axis Midcap fund
Axis Small cap fund
Quant Active Fund
Parag Parikh Flexi Cap fund
PGIM India Flexi Cap Fund
Mirae Asset Emerging Bluechip Fund

These are the top-performing mutual fund in 2021. You can check the data of these mutual funds. And after that, you can take any decision.

If you want to invest money in PPF and NPS with shares, then you can. Anyway, you should not invest all your money in the share market itself. Both NPS and PPF are tax-free investments. You can invest a maximum of INR 150,000 in PPF in a year. And on this investment, you will be given a fixed interest rate. And all your money on maturity will be tax-free. In such a situation, PPF is a good investment. Whatever money you earn in the share market is not tax-free. But in NPS also you can take advantage of the tax-free facility. But both PPF and NPS are long-term investment plans. You cannot withdraw your funds before maturity.

How to invest in PPF and NPS

So if you want to invest in PPF, then there are many banks through which you can open a PPF account online. You can also open a PPF account in SBI Bank. With this, you can also open a PPF account in the post office. Below I am sharing the names of some banks where you can get a PPF account opened.

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  • SBI and its subsidiaries
  • ICICI Bank
  • Axis Bank
  • HDFC Bank
  • Central Bank of India
  • Bank of India (BOI)
  • IDBI Bank
  • Punjab National Bank
  • Indian Overseas Bank, and few others

So if you have an account in any of these banks, then you can open a PPF account. There are some banks in which you do not even need to go to the branch of the bank. You can also get a PPF account opened by you or through net banking of your bank.

Now let’s talk about how you can get an NPS account opened. If you invest in Mutual Funds, you can invest in NPS either through the Mutual Funds App or through Bank App.

Is Day Trading or Option trading good for beginners

Options trading is a risky task. And in this, if you do not have much knowledge about the share market, then you can also lose all your money. In Day Trading, when you invest in a stock, you have to sell the stock before the market closes. If the price of the stock falls, then you can also make huge losses. That’s why I would like to tell the new traders that if they are thinking of earning more money and want to try their skills in options trading, then it is important for them to have some knowledge about it first.

When you earn more money in options trading, then you feel the urge to earn more money. And you forget why you have come to this platform. And when you have a loss, you invest more money to recover that loss. And in the same way, all your treasures are empty too. Yes, many traders make good money from options trading. But he has a lot of experience in this field. So options trading is a type of gambling. It is useless to go into options trading without knowledge.

What to do when the stock market crashes?

This question comes to many people that what should we do if the stock market crashes. The stock market crashed in 2020 due to COVID. But you must have seen that only a few days after the crash, there was a boom in the market again. So if the market crashes, the recession doesn’t last forever. First of all, you should not panic. And never sell your shares at a loss. If you have good stocks in your portfolio which are fundamentally strong then you do not have to sell them. Rather, in such a situation, you should buy more shares.

Because at that time you get the shares at a very low price and in future you can sell them at a good rate. Whenever the stock market falls, there is an opportunity for investors. At that time, they buy many shares at very low prices. But that’s about it for retail investors. And out of fear, they sell their shares at a loss only. So it is not that beginners cannot invest in the stock market. If you invest in good stocks then you can hold these stocks for the long term and also earn good returns along with dividends in long term.

Is it a good idea to invest in crypto market

Today many Indians are also investing in crypto and crypto is also giving good returns. But the crypto market is very volatile and riskier than the stock market. But in crypto also you can invest in Fundamental strong coins like Bitcoin, Ethereum, Cardano, Solana, terra, and DogeCoin. But today we will not talk much about crypto in this article. If you want to know more about crypto then you can read our crypto articles. You will get more information about this from there.

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Conclusion: If you are new to the stock market, you should invest in such fundamentally strong stocks. And you can start investing with a small amount. Together you should get more information about the share market. If you are a busy person and you cannot keep an eye on the stock market, then I would advise you to invest in mutual funds.

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