Share investment is seen as a way to grow your income. While the market is risky, there is no doubt you can grow your wealth if you stay invested in the market for 5-10 years.
Long-term investments have proven to be successful. In fact, many studies suggest that these investments can bring higher returns than gold and property investment.
The share market is volatile, which means the price of the stocks keeps fluctuating on a daily basis. Usually, investment is considered as a way to save some money for your retirement and future goals.
You put some money into the growth of a reputable company and make profits in the future. However, there is no guarantee the value of the shares you have purchased from a company will witness a growth.
The share market can be defined as a centralized platform where buyers and sellers gather to make trades. It involves the same day trading or long-term holding. Investors can either sell shares on the same day they purchased them or hold on to these stocks for years.
The longer you keep the shares, the more returns you are likely to earn from the investments. In fact, there is no maximum limit as to how long you are allowed to keep the shares of a company.
Understanding the Share Market Investment
Before you enter the stock market, it is important to gather information about the popular stock exchanges in India.
BSE and NSE are two of the most popular stock exchanges where a number of companies place hundreds of thousands of shares on a daily basis. These shares are then purchased by individual investors.
The purchase and sale of shares are no different from the sale of commodities.
However, it is a little complex and volatile. The value of the share increases when the company makes profits. The growth of the company can result in the increasing prices of the shares.
That’s how the investors make a profit. They purchase the shares of a company when they are sold at the lowest price and sell them when the price increases.
Intra-day traders sell the shares when they notice even a small hike in the price. Long-term investors, on the other hand, hold the shares for several years. The small fluctuations in the regular prices of the stock do not affect their investment decision.
Note that the income from the share market is subject to tax. Long-term gains involve a fixed 10% of the tax on the income that exceeds INR 1 Lakh. Short-term gains involve a 15% tax on the income earned from the sale of the shares.
As simple as it sounds, the share market can turn out to be a complicated industry for beginners. If you are new to this market, chances are you will have no idea when to enter and exit the investment. One of the biggest mistakes is entering the stock industry when you don’t know how to control your investment.
Setting up an account on an online share trading platform will not suffice. In order to start making money from this industry, you are supposed to understand your risk appetite and investment goals.
Online Brokers
You can hire a full-service broker to get a complete trading guide. As the name suggests, these brokers offer you financial advice, healthcare and retirement plan, and the basic information related to the share market.
Now that they offer a comprehensive package, they charge a substantial fee from the clients. Mostly, professional investors hire full-service brokers.
Nowadays, people opt for Robo-advisors to get started with share trading. The fund managers or brokers complete share transactions on behalf of the client.
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