How To Buy Stocks Online?

10 Jul 2017

In the older times, stock market was difficult for a common man because of lack of know-how. That is why it was extremely essential to consult a stock broker before investing. Back then, the brokers were the only source of stock purchase.

The internet has solved this problem for the common man. Now there are a large number of websites that give you a good working knowledge of the stock market. They can also give you good advice about when you should and shouldn’t invest in shares.

Thus, with the authentic information about stocks that is available on the internet, people with limited savings can get good knowledge about the stocks. They can not only get information about the stocks, but they can also buy stocks online starting from prices as low as Rs. 500. 

Process of Buying Shares Online
1) To buy and sell shares, one needs Demat and Trading accounts. Both of these are provided by the two Depositories namely NSDL and CDSL through brokerage companies. One has to visit or contact a brokerage company offices for opening those accounts.

2) Generally, stock trading is possible in India between 9:30AM to 3:30PM. Stocks can be traded on all working days from Monday to Friday. The stock exchanges are closed on bank holidays and national holidays.

3) You can log into you online Trading account. Visit the online portal of your trading account. To log into your trading platform, you will have a user name and a password. Make sure you memorize these important login details.

4) It is important to do a pre-study before selecting a stock. Stock study is not just a study of its market price. More than the price,  it isimportant to judge the company’s fundamentals.

5) To buy stocks, put a buy-order to trading account and wait for order execution. Setting up a price-limit to buy stocks is a good habit.

As you can see brokers are no longer a necessary part of the transaction while buying and selling shares. However, it is still advisable to consult a broker.

With the changing times brokers too have modified their services. Few years ago, there was only one type of broker, the Full-time broker who handled the complete buying, selling and monitoring of your shares. Today there are different types of brokers available in the stock market:

Types of Brokerage services

Full-service broker
Full-service broker is a broker who gives Stock advisory plus trading facility to the investors. They generally charge 0.3% to 0.5% of the total amount invested by the customer as brokerage. Suppose you buy 1000 ICICI bank shares for Rs.500 each, your brokerage charge would be Rs.500000*0.5%= Rs.2500

Discount Broker
These are new brokers who provide a trading platform to the investor but don’t give much advisory. Discount brokers usually charge Rs.20 per trade, irrespective of amount. Suppose you buy 1000 ICICI bank shares for Rs.500 each, your brokerage would be flat Rs.20.

People who are not so internet savvy and hesitate to buy stocks online it is great to refer a broking agency. Check out 5paisa.com to find out the services on offer for trading in stocks online. We offer a flat rate of Rs.10 for every transaction whatever the value of the deal. This makes our  services valuable whenever you are buying shares.

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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How To Buy Stocks Online?

10 Jul 2017

In the older times, stock market was difficult for a common man because of lack of know-how. That is why it was extremely essential to consult a stock broker before investing. Back then, the brokers were the only source of stock purchase.

The internet has solved this problem for the common man. Now there are a large number of websites that give you a good working knowledge of the stock market. They can also give you good advice about when you should and shouldn’t invest in shares.

Thus, with the authentic information about stocks that is available on the internet, people with limited savings can get good knowledge about the stocks. They can not only get information about the stocks, but they can also buy stocks online starting from prices as low as Rs. 500. 

Process of Buying Shares Online
1) To buy and sell shares, one needs Demat and Trading accounts. Both of these are provided by the two Depositories namely NSDL and CDSL through brokerage companies. One has to visit or contact a brokerage company offices for opening those accounts.

2) Generally, stock trading is possible in India between 9:30AM to 3:30PM. Stocks can be traded on all working days from Monday to Friday. The stock exchanges are closed on bank holidays and national holidays.

3) You can log into you online Trading account. Visit the online portal of your trading account. To log into your trading platform, you will have a user name and a password. Make sure you memorize these important login details.

4) It is important to do a pre-study before selecting a stock. Stock study is not just a study of its market price. More than the price,  it isimportant to judge the company’s fundamentals.

5) To buy stocks, put a buy-order to trading account and wait for order execution. Setting up a price-limit to buy stocks is a good habit.

As you can see brokers are no longer a necessary part of the transaction while buying and selling shares. However, it is still advisable to consult a broker.

With the changing times brokers too have modified their services. Few years ago, there was only one type of broker, the Full-time broker who handled the complete buying, selling and monitoring of your shares. Today there are different types of brokers available in the stock market:

Types of Brokerage services

Full-service broker
Full-service broker is a broker who gives Stock advisory plus trading facility to the investors. They generally charge 0.3% to 0.5% of the total amount invested by the customer as brokerage. Suppose you buy 1000 ICICI bank shares for Rs.500 each, your brokerage charge would be Rs.500000*0.5%= Rs.2500

Discount Broker
These are new brokers who provide a trading platform to the investor but don’t give much advisory. Discount brokers usually charge Rs.20 per trade, irrespective of amount. Suppose you buy 1000 ICICI bank shares for Rs.500 each, your brokerage would be flat Rs.20.

People who are not so internet savvy and hesitate to buy stocks online it is great to refer a broking agency. Check out 5paisa.com to find out the services on offer for trading in stocks online. We offer a flat rate of Rs.10 for every transaction whatever the value of the deal. This makes our  services valuable whenever you are buying shares.

Have Referral Code?