What is a stock market?

A stock market is a forum for trading, where the investors buy and sell shares of publicly traded
companies for returns that beat inflation. It has two major exchanges in India:
Bombay Stock Exchange—This stock exchange was established in 1875, and it is regarded as
the oldest one. It is also called SENSEX.
The NSE- National Stock Exchange, instituted in 1992, is the biggest stock exchange in India. It
tracks shares of the major 50 companies in India and is referred to as Nifty 50
Benefits of Investing in the Indian Stock Market
Though there are conventional investing options that offer guaranteed returns, investors are
attracted to the stock market because of its exponential gains. Additionally, trading guarantees
liquidity.
For example, an investor buys 100 shares of Adani shareholdings at Rs 2600. Later, if he
wishes to sell them at Rs 2700, he can do so immediately. The ease of buying and selling the
shares strengthens the investor’s interest.
Above all, the investor can diversify the investments in several sectors, thereby reducing overall
risk.
Types of Stock Market Investments
The stock market offers a palate of investments for different investors with varied risk appetites.
Low-Risk Appetite—If you are a new entrant in the market and do not want to throw money
down the drain, you can begin with SIP, which stands for Systematic Investment Planning. It
eliminates drastic market shocks and gives you a cushion even when the market is not
performing (keeping in mind the long-term perspective).

Risky Appetite: If you carry risk on your sleeves, investing in the equity stock market is
something that you can aim for. It helps you earn good returns and construct wealth over time.
Moderate Appetite—If you want moderate returns, a balanced approach to investing in debt
instruments is necessary. These instruments help preserve capital without exposing you to too
many risks.
Basic Tips for Investing in the Stock Market
● If you are a new investor and wish to enter the stock market, consider your financial
goals. They should align with your investment strategy.
● Don’t get too attached to a particular stock, and don’t panic if the market crashes. Start
small and have a long-term vision.
● Keep an emergency fund aside before investing in the stock market; otherwise, you
might get burnt out.
● Follow financial news, research, and gauge the stocks that you have started investing in
closely.
● Reinvest the money to understand how the stock market works.
Every investor; whether new or established, should follow these directives before diving deep
into the stock market. Unlike traditional investments, they won’t give you guaranteed returns but
offer you better returns once you have the right strategy in your pocket. The best broker in
Mumbai can assist you in your investment journey.
Frequently Asked Questions
Do stock market gains attract tax?
Yes, you have to pay capital gains tax on the gains achieved through the stock market.
Is investing in the stock market risky for the beginners?
Yes, options like short selling or intra-day trading can be risky for traders. They should start with
a small investment option and then make it large.
How can an investor make money through the stock market?
Investors get paid off with returns when buying or selling the stock, and the company also pays
dividends on a quarterly or yearly basis.
Is there any minimum amount to start trading?
You can start trading with a minimum of Rs 500, and the maximum depends on investment
capital and as per SEBI regulations.
How do I start investing in the stock market over the Internet?
The investor has to open a Demat account, do KYC, add money to the account, start trading,
and then monitor them. The best broker in Mumbai will make the process less complex.