Comprehensive FAQs on Indian Share Market Investment, Answered
Investments | by 2 | on 2020-10-15 04:57
When people think of the Indian share market, what usually comes to mind is a bunch of people in suits lugging around briefcases. People unacquainted with the field don’t often think of online mutual fund investments and other intricacies. Many newcomers to the Indian financial sector walk in with a set of pre-formed misconceptions about the field. Ultimately, these can be severely detrimental to their career in the long run. Wouldn’t life be simpler if we all had a nifty guidebook to help guide us through the seas of Indian finance! Fret not, because India’s biggest stockbrokers are always there to clear the air about the common misconceptions in the field. Have a niggling doubt about the Indian share market? Chances are high you’ll find the answer you’re looking for here!
Indian Financial Basics
Before we get into the in-depth FAQs of the Indian financial sector, let’s establish the fundamental terms for those new to the field. Welcome to the glossary of the Indian stock market!
The governing body of all stock trades in India. The Securities and Exchange Board of India signs off on the transactions and ensures fair practice all across the board.
The Initial Public Offering is the event where a company on the stock market makes an offering and calls for investors.
These agencies act as the middlemen between traders. Their role is to advise traders on potential stocks and trade opportunities. Usually, they will charge a specific brokerage fee.
These are metrics by which the economic trends are measured in the Indian stock market. India knows indices such as Nifty and Sensex.
According to the industry moguls, this is the happening future of the share market in India. Online trading in the share market is how business is done in the country these days. As you may be knowing, Zebu Traders is a pro in online trading in India!
Aside from this, there are evident entries such as the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). Everyone from the largest stock broker in India to new entrants to the sector familiarises themselves with the fundamental terms. You should learn too! Don’t forget to do your homework before you dive in!
The Fundamental FAQs
Now that we’ve established the basics of the trade let’s dig deeper and answer some of the more common questions new traders face.
Q) Why do I need a Demat Account?
Most new entrants into the Indian stock market often wonder why this seemingly unnecessary step is part of the process. The fact of the matter is that Demat accounts help keep your stocks secure from fraud. It also gives you a seamless way to manage your shares, no matter where you are in the world. A Demat account stores your stocks as a “dematerialised” entity, hence the name. It’s your ticket to the Indian trade world!
Q) What’s the difference between shares and stocks?
There’s often a lot of confusion around these terms. Understandable, because the two words see usage freely together. India’s biggest stockbrokers know the clear-cut difference between the two, however. Stocks are property entities that denote a particular company’s assets. Shares are smaller assets that confer ownership to a trader, depending on how many shares they own. Individually, shares hold minimal value, while stocks have a fair amount of weight.
Q) What are the different types of shares I can acquire?
As you may know, shares are ownership assets that entitle the owner to a portion of the profits. There are two types of shares common in the Indian share market. Preferential shares ensure that you get paid upfront during stock liquidation, but it doesn’t come with voting rights. On the other hand, equity shares are far more common, especially in online trading in the share market. They come with voting rights, hence their popularity.
Q) Should I invest in mutual funds or shares?
New entrants into the Indian share market scene often grapple with this question. There is no straight answer to this because it’s a question of personal preference. It ultimately boils down to the risk vs reward mentality. People who are regulars in online mutual funds investments will tell you that there are lesser risks involved with mutual fund investments when compared to shares. Conversely, the time involved in hitting a payout is significantly higher with mutual funds. Shares make you part and parcel of the company’s success, which is why India’s largest stockbrokers swear by them. Also, you don’t need a Demat account to invest in a mutual fund!
Q) Is online trading on the Indian share market safe?
Online trading in the share market is one of the most hassle-free options in today’s business world. It offers you the power and flexibility to trade on the go. As long as you approach SEBI-approved brokers and set up a Demat account, the entire process is streamlined. You get live updates and insights on market research. Online trading also offers you better facilities such as access reports and investment reporting.
Q) What does the face value of a share mean?
When buying shares, you will face two types of valuations: the market value and the face value. The market value of a share fluctuates with time, based on market trends. The face value, however, is static. It is the projected monetary value on paper of the property. When investing, you have to consider both factors when taking the plunge.
There’s a fair amount of homework involved when new traders enter the Indian share market. Remember though, India’s biggest stockbrokers got to the top through meticulous research and commitment to their business and investments. The game of shares is a game of patience that requires careful planning and tact. Most importantly, having clarity and avoiding common misconceptions is key to your success. Is it safe to invest online in mutual funds? Can I ever make profits in the Indian share market? All these questions can only be answered if you dive in and take the plunge. Zebu Traders can help you with all your share market and investment requirements as a premier online trading platform!
What are the pros and cons of investing in Indian share market?
The pros of investing in the Indian share market include the profitability and the fast-paced nature of the trade. The cons involving share market investment deal with the volatile nature of the field.
How to invest money in the share market?
To get started in the share market, you will need to open a Demat account and get in touch with a SEBI-approved brokerage firm.
What is the minimum investment amount in the share market?
One of the advantages of the Indian share market is that there is no minimum ceiling on share investments. You can buy even 1 share of a company if you want!
Who is the best stock broker in India?
Some of the best stock brokers in India offer their services at optimum rates. Zebu Traders is one such brokerage firm that specializes in online share trading.