Zomato IPO Review: Can A loss making Company Provide a handsome Listing gain?

                 As a beginner, it is obvious to find the correct way is not so easy. To start any kind of activity, if it is productive, it requires a lot of correction that led us away from mistakes. But as we know, Mistake is the first step for convincing growth, It helps us to find out the new way, new technique to perform the activity and to look at the situation in a different way. Like that; as a beginner, in the stock market, it is very essential to understand that there are various stages where we may occur mistakes. And for that, we should understand the primary requirement to minimise the risks by which we may able to keep safe the capital invested. Otherwise the beginning of the journey may be converted to the end of the Investing.

                So, we are here to discuss  how to start investing as a beginner in the Share market, and How we could grow the capital with minimum mistakes.

                Before we start, if you don't know what is share market and how could any one earn, then click here to know more.

Stock Market: From People's perspective

               In the mind of general public, Share market is a place of Gambling where people either become crorepati (Billionaire) or become insolvent(Beggar). It sounds very unpleasant, when a person near to you explain how share market destroy a person. But as a beginner, you should listen the words and and should aware not to do those activities which makes people insolvent(Beggar). You don't need to do anything to become billionaire but you should consistent with the activity which prevent to become beggar. We will discuss about it later.

 Stock market with little Money:

                More than 90% people won't imagine stock market without a big Capital. They think, to become investor, it is very essential to come with a huge capital. But actually, it is also not the perfect theory of Market. A person can start investing with a minimum capital of 500 INR. Surprise? Let's understand How?

                It's very simple, It is same as the story of thirsty crow story. If you keep a small amount in regular basis by purchasing single single good valued stock, it will increase the capital by way of dividend, capital growth, bonus etc. It is sure, it will take some extra time. But it will minimise the risk of Capital wipe out. 

                As the beginner, what people do, like; they enter into stock market with a big capital and start trading and investing with a very less knowledge or by some tip in derivative sector( derivative sector is nothing but part of share market, where stocks traded at various contract), and then when they saw, they are in small profit, they booked it, and think, it will be a loss if they won't book it and at time of loss, they wait for the time when it will come to profit, but it goes to a huge loss.

                To avoid the above mistake, it is good to come up with small capital, and gain the knowledge, discipline and strategy from share market and then shall take step towards full time trader.

 The Beginning Step:

                Trading stocks on share market provides freedom to work from everywhere, to utilise their fund in proper manner to achieve their financial goal. Today with the help of electronic trading platform, anyone can start trading by opening a simple demat and trading Account. For this the following requirements are necessary:

1. Documents Required

•     Your PAN Card (Compulsory)
• ·  Your Aadhaar Card (Compulsory)
• ·  Your name on a canceled cheque from your active bank account/ Six Month       Bank  transaction statement
• ·  A proof of your residence based on a list of documents that have been accepted by your broker, depository participant, or bank
• ·   Documents detailing that you earn an income
• ·   Passport-sized photographs of you

                There are some online platform where you don't need all the physical documents and you can open demat and trading account with the soft copies of above documents.

2. Demat Account

            A demat account is that which will hold one’s shares in the name of the account holder. A demat account serves as an electronic house for your shares. It is opened online with the help of a depository participant. Many banks also offer Demat account services to their investors. 

3. Trading Account

            A demat account and trading account go hand in hand. Demat refers to ‘dematerialized’ which means it is a storehouse for your shares. A trading account, on the other hand, is the account with which you buy and sell securities that you wish to trade on the stock market. When it comes to investing in stocks for beginners, you cannot do so without having both a Demat and a trading Account. The BSE and NSE are both primary exchanges where most good quality stocks are listed. However, some stocks may only be available on either one of these two exchanges. Hence, a general tip is to open your trading account with a depository participant who offers trading on both BSE and NSE.

4. Bank Account

                For Investing and trading in share market, how the demat and trading account is necessary, likewise Linked bank account is also important.

These days you can find two in one accounts that serve as both a Demat account and a trading account. In between them there are some best trading platform are : Zerodha, Upstox, Angel Broking.

    Investing Process:

    After understanding about the process of trading and demat account opening, let's catchup investing process in different market:

 

1. Investing in the Primary Share Market:

           A company who wants to listing its shares or an existing company who wants to raise fund by further issuing new shares to public, they go through the Initial Public Offer process(IPO). We already discussed about Primary share market in our previous topic. So, for applying shares through IPO, one person required a demat account and net banking or UPI facility to raise an application for IPO. A person can apply for Maximum INR 2,00,000 through IPO as retailer. The application will be processed and required fund will be blocked in your bank account. If the shares will be allot to you, the money will be credited from Bank account. And, if the application got rejected for any reason, like excess subscription, wrong unit applied, multiple application from different demat account with same PAN, then the blocked money will be released to bank account itself. 

2. Investing in the Secondary Share Market

            The secondary market is usually what traders are talking about when they refer to stock market investments. Here are a few key steps toward doing so:

Step 1: For investing secondary share market, it requires both Trading and Demat Account with a linked Bank account. The linked bank account helps to transfer the fund from bank to Trading account and vice versa. Just transfer the required fund with which want to start trading.

Step 2: After transfer of fund, you need to choose the share you want to trade and easily you can buy and sell without any hesitation. There are few terms require to know, about which we will discuss.

Step 3: Complete your stock market investment transaction by transferring the money/shares and you will receive money/shares.

So, the above discussion says a lot about the investment and trading process, I hope it will help a lot to start a new Journey. But I want to add some key point which should be in mind while trading and investing in stock market.:

Key Points to remember as Beginner:

• Maintain Discipline: It is the primary stage to maintain discipline. No discipline, No gain. Share Market works like that. You need to keep attention on strict Stop Loss and Risk Reward ratio.
• Follow Proper Risk reward Ratio: It is very important to safe your capital and also book profit. So, it is very essential to maintain a measurable risk and reward by which it won't let your capital down.
• Control your Emotion: At the moment of trading, it is very difficult to control the emotion as it is attached with the money invested. But you need to believe in your strategy which will keep away from emotion.
• Build strategy: It is very essential to work on own strategy that suits you. Never jump for over trade. Learn the basics and follow for your set up. It will help to improvise your skill and art for achieving the target.
• Basic learning: It is the primary fact that, Basic learning is most important to grow the knowledge and catch the movement of share. So, it should be prioritised.
• Set Long Term Goals: If you are focusing on investments, then target for the long term. High the duration, will increase your wealth by different way.
• Investment Diversification: Investing all money in a single share or single category share will be the same as keeping all eggs in the same basket. Either it will succeed or it will destroy all your portfolio. So to maintain a proper portfolio, it is very essential to invest in a different sector.

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