From Beginner to Investor: Learn How to Trade Stocks Online

Learn How to Invest In Stock Market Online

Gone are the days when retirement from active working meant the end of a productive career or earning capacity. Today, retirement is seen as the time for fulfilling passions and hobbies that you put on hold or didn’t have the time to pursue. It is increasingly seen as the phase when one has the vitality and the resources to enjoy one’s life. However, it can also be a stressful period for some who still need a source of income. For others, it can lead to anxiety over the sufficiency of their savings to lead a comfortable life.

The stock and investment market offers great opportunities for those in the golden period. If practised correctly, it helps you grow your savings and continue to have a recurring income. The first step to stock or equity investment is to have clarity over two points:

A. Objective: Decide beforehand what are your trading and investment objectives. It could be to have a regular income by way of interest or dividends earned or it could be to grow your savings and have them work for you.

B. Risk Appetite: This simply means the amount of money you are willing to put to work through equity investments and the risk you are willing to take with it. If you are in a comfortable position, you might choose to go the high-risk high-returns route or choose a more conservative approach of low-risk moderate-returns.

Once you have decided on your Objective and Risk Appetite through the first step, the actual process of investing is quite straightforward. Today, with the emergence of fast internet and smart technology, investing in the markets is very convenient and available at your fingertips. The emergence of broker-led investment mobile applications or web portals has many advantages for the investor:

Convenience: With the investment process becoming completely digital, individuals can now invest in the markets, monitor their investments and get performance updates at the click of a button.

Real-Time Updates: It has become increasingly simple to keep an eye on real-time updates and the performance of your shares through live market data. With global and local news available on the phone, one can stay informed on the latest happenings and their effect on the stock market.

Easy Access and Action: Through round-the-clock digital access to your investments, it is very easy to buy, sell or place trades on your investment in line with your objective.

Having understood the starting point and seeing the ease of investing, let us now look at the short process of getting set up.

How to Invest in the Stock Market in India Online?

Step 1 - Open a DMAT account on a broker platform of your choice. Link this DMAT account with your primary bank account.

Step 2 - Download and log in to your DMAT account through a mobile application or a web portal.

Step 3 - Select the stocks you want to invest in, check their rates and decide on the number of units you want to purchase.

Step 4 - Ensure you have sufficient funds for the stocks selected.

Step 5 - Purchase the selected stock through the ‘buy’ option by specifying the number of units required.

Step 6 - Wait for the trade to go through. Once a seller matches the request, your purchase will be processed. The corresponding amount will be debited from your account. The purchased shares will reflect on your DMAT portfolio.

You can now buy or sell shares depending on your appetite and interest through the same DMAT account.

Documents Required for Opening a Demat Account

The following documents will be required by the broker platform to open a DMAT account for you:

1. Pan Card
2. Proof of Address
3. Bank Account
4. Proof of Identity
5. Cancelled Cheque

Benefits of Investing in The Stock Market as a Senior Citizen

Better Taxability - Income generated through stock investment of fewer than 12 months is called Short Term Capital Gains (STCG) and is taxed at 15%, however, income generated through stock investments held longer than that, referred to as Long Term Capital Gains (LTCG) is taxed only 10%. Other interest income from fixed assets gets taxed as per your income slab and can go up to as much as 30%. When compared, stock investment returns mean lower taxes for higher returns.

Additional Income With Dividends - On retirement, the pinch of losing regular income and becoming dependent on savings can be addressed through the income generated via dividends and equity mutual fund investments.

Wealth Creation Post Retirement - By optimally managing risk-to-gains ratios and investing in the most efficient portfolios for your objective, you can add substantial funds to your savings thereby creating more security for yourself and additional room for hobby or passion expenditures.

Factors To Consider Before Making Stock Market Investment:

• Always remember your objective and risk-taking ability before you start dabbling into stock investments, but just doing that is not enough to ensure the safety of your funds.
• Diversify Your Portfolio - Even though equity investments are volatile, it is possible to mitigate your risk by allocating your funds across several tools and investment options. Build a portfolio that protects you from the ups and downs of markets through a combination of safe options and high-risk high-return investments.
• Pooled Investment Options - To further safeguard your investments, you can choose to invest in pooled equity mutual funds. They work by pooling capital from several investors and distributing it across a diversified portfolio, thereby reducing risk and delivering sustained gains.
• Safe Alternates - If you are uncomfortable with the risk factor of equity investments, there are other government-backed, modest-gain investment instruments available. These include Pradhan Mantri Vaya Vandana Yojana (PMVVY) and Senior Citizen Savings Scheme (SCSS), which offer assured returns on your investments.
• Taking the Long View - Instead of chasing quick returns within short durations, which can easily derail your efforts, aim to strengthen your basics and add to your long-term objective.
• Start Small - All the information, options and the need to be tech-savvy all at once can be overwhelming. Take your time, start small, and gain knowledge along the way. There are many expert resources available online and through social media that can guide and hand-hold you through this process.
• Expert Advice - Getting an expert perspective can help you turn into a seasoned investor. An expert can help you assess your investment purpose, assist you in designing your investment strategy and help you arrive at a balanced investment approach.

Conclusion:

Learning how to invest in the stock market online can give you additional income, the freedom to do more and enjoy financial security in your golden years post-retirement. With technological advancements, the whole process has become simple and can be completed from the comfort of your home at the click of a button. By mitigating the risk through the right investment strategy, and a systematic and planned approach, you can master the skill of online investment and enjoy the benefit of additional income.

FAQs on How to Invest In Stock Market Online

• Is it safe to trade online? - The process of opening a DMAT account, buying or selling shares and making or receiving payments is fully automated and monitored by SEBI, making it secure from any fraudulent activities.
• What are the benefits of online trading? - Being able to complete the whole process from the comfort of your home, round-the-clock access and updates, closely monitoring your investments and the market movements, faster and easier transactions and an enhanced understanding of your finances are some of the main benefits of online trading.
• Which is the best place for a beginner to learn stock trading in India? - There are various options to learn the basics of stock trading - from online information portals, YouTube channels, expert groups and courses offered by brokerage firms. You can choose to pursue an option that works best for your learning style.