FAQ: Stock Market For Beginners – How to Start Investing?

Did you know business magnate Rakesh Jhunjhunwala invested Rs 5,000 in the stock market, as a college student?

Now dubbed the ‘man with Midas touch’, Jhunjhunwala boasts a portfolio worth Rs20,000 crore.

Yes. That happened.

Want to be the next Jhunjhunwala, but no clue where to begin?

Here’s how to start investing in stock market.

What is the minimum amount required to start investing?

There is no minimum amount requirement. You can invest anything between Rs 100 and Rs 5,000, as a beginner. However, you need to open a Demat account for investing in stock market.

What documents do you need to open a Demat Account?

• PAN Card

• Aadhaar
• Cancelled cheque
• Bank Statement
• Passport-size photos

Once, I get this account, can I start buying and selling shares?

Not really. You cannot buy or sell shares directly from the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). You need a stock broker to do this for you.

What are the different types of stock brokers?

Direct Brokers:

• Provide advisory services
• Charge a percentage of transaction as brokerage every time you buy and sell shares
• Higher the amount, higher the brokerage
• Examples of direct brokers: HDFC Securities, ICICI Securities

Indirect Brokers:

• Charge you a flat brokerage
• Start trading/Investing in an hour
• Buy shares with a single click

What are some investment tips?

• Invest in large-cap stocks as risk is minimum.
• Don't put all money in one company.
• Increase investment amount with time.
• Follow news – read about stocks you want to buy.
• As you must've heard, such investments are subject to market risks.