Investing in the stock market can seem intimidating for beginners, but it doesn’t have to be. It is a skill that can be polished over time. However, having access to the right knowledge about the Indian share market is very important if you are an Indian investor. If you are a beginner and want to learn investing in the Indian stock market, here is a no-nonsense guide that will provide you with 5 stock market insights to get you ready for the game.
- Stocks: What Do They Exactly Mean?
Before we get into stock market insights, it is important to first understand what stocks are and how the stock market works. Stocks represent ownership in a company, which can provide investors with potential returns through increased stock prices or payments from company profits. The stock market or the share market India provides a platform for companies to raise capital by issuing shares that the investors can trade in.
Share Market India is fuelled by the NSE (National Stock Exchange) and the BSE (Bombay Stock Exchange). As a new investor, you must keep an eye on their indices.
- Price To Earnings Ratio
This is an important ratio to consider before investing in the stock market. You can see a P/E ratio on the stock market app of your choice. To determine the P/E, you have to divide the current stock price by the earnings per share (EPS). A higher P/E usually indicates a higher growth expectation, while a lower P/E indicates a lower growth potential.
- Types Of Brokerage
Earlier, you could not invest in the stock market without a broker. The situation is similar now, but access to brokers has been simplified with low-cost to zero brokerage share market apps. A tech platform, such as a share market app, falls into the category of discount brokers. This means they can provide access to the stock market but not many additional services. A full-service broker, on the other hand, provides a range of financial services, investment advice, and portfolio management, among other services.
- Bull Vs. Bear
Your share market insight is incomplete without the knowledge of these two animals. A bull indicates a rise in stock prices which increases investors’ expectations. A bear market, on the other hand, shows a downward trend in stock prices and hampers the spirit of investors.
- Lastly: Know Your Risk Appetite
New investors can be extremely motivated. They are enthusiastic about learning all the stock market insights, downloading the latest share market app, and starting to invest. However, it is essential that every investor takes a moment to assess their risk appetite realistically before investing. Take some time to go through your financial goals and your tolerance towards market fluctuations.
There are many more stock market insights that you should know, but these can help you get started. Becoming an investor in the share market India will require knowledge, skills, and patience at every stage, which you will learn once you are in the game. So, go ahead, download your favourite share market app and start investing to reach your financial goals today!