Investing online in the securities market generates better returns than traditional savings instruments like fixed deposits and recurring deposits. However, in order to earn big by investing in the securities market, it is essential to learn the tricks of the trade – ideally, it takes years of understanding various aspects of the market in order to make large gains. For beginners, there are certain things that need to be kept in mind while investing in the securities market, for mistakes can very well lead to costly losses.
Here are some valuable points that you can keep in mind while investing in the share market:
- Choose the right investment
There are several options available to you in the securities market – there are shares of companies, government bonds, insurance products, etc. Each of these investment instruments have their own features and characteristics. For instance, investing in a government bond is safer than investing in the shares of a company. But, contrary to the extent of returns that can be derived by investing in the share market, government bonds don’t quite yield high returns. Moreover, a government bond is technically a long-term investment instrument. So, depending on your long-term or short-term objective, you must decide on an investment instrument that will best suit your needs.
- Choosing a platform
A platform here can refer to an online brokerage website that will give you a wide choice. Online brokerage website offer different types of investment instruments including mutual funds, insurance products, derivatives and bonds. You can choose a product that will ideally suit your needs. Do some research on online brokerage sites that are available to you and choose a site that ranks high in credibility and investor satisfaction.
- Providing KYC details
Presently, all online brokerage sites and mutual fund houses require you to provide your KYC details. Also, some sites require you to register your Aadhaar details with your bank account. PAN details also need to be provided in order to commence. These details will be required when you want to withdraw your money. You will be required to provide your bank details - your account number, IFSC code, etc.
- Linking your bank account
Your online account with a mutual fund house or an online brokerage website requires you to link your account with an active bank account. All money dealings will take place through your registered bank account. Even if you wish to redeem your mutual fund units, the amount you wish to redeem will go directly into your bank account.
These are the most essential prerequisites if you wish to begin investing in the securities market. As mentioned earlier, the practice takes years to master – in fact, it takes a few years to actually realise an investment product that will enable you to gain significant returns. There are countless products out there, so make your choices wisely!
