Beginner Series – First Step towards investing

I have decided to help the beginners with the little knowledge that I have acquired. From now on, I will write one article per week that will be exclusively for the beginner who wants to invest in stock market for investing purposes and not trading. There is considerable difference. Trader buys stock and sells them at a better price where as an investor buys stock keeps it till its real value is met and he sells it. The time period is what that has to be noticed in here.

I would like to make myself clear that, I am not going to give advices. It is just a suggestion. I know most of us won’t like to be advised and I have that in my mind. I have written many articles regarding how to go about entering the stock market and I am sure you would have read them. Just in case if you have missed them, please look into it. You can get them easily by searching the blog. If you want me to help you out then just shoot a mail. J

First step: Read this article, I have explained about various things that I think an investor should do. This is not the complete steps but it is good for a beginner and not a professional.

Second Step: There are various broker houses and select one according to your needs. For that, you should know what is your need? Since it is something to do with your money, be careful about it and just not be your usual self of choosing some broker house just because you have to choose one. There are various broker houses namely, icicidirect.com, indiabulls.com, religareonline.com, angelbroking.com, 5paisa.com, sharekhan.com and many others.

Suggestions to choose the broker house

Firstly get the commission details of all the broker houses. (I would have done that for you, but thought it is not a good idea).

Since the demat account (account to keep shares) and your savings account have to be linked ensure that there is considerable security and there are no loop holes.

Services you need that facilitates day trading, futures, options and others. If you are interested in commodities then there are various options for that, I am not interested in it and have not explored in that area.

Sometimes some broker houses might not support all the AMC so it is good to know them in advance.

Third Step: Document you need to open a trading account.

  1. Identity proof: If you are working and your salary account is with the same bank then your company id is enough else you have to give any photo identity like PAN Card, Passport or Driving License.
  2. Address proof: PAN card, Passport, Driving License, Telephone bill or Mobile bill.
  3. Bank Details where you have your savings account.
  4. Generally you can’t do this online. You have to walk in to nearest centre and do it.
  5. And lastly you need to sign whole lot of papers. I know you won’t read the documents carefully; it would be good if you can.

All the best for your success in the stock market.

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