All you need to know about investing in the Indian stock market
The Indian stock market has consistently outperformed the international market over recent years. In India, the Indian equities markets have historically always had quite a high risk-return profile. However, in one of the global economic crises, the Indian stock market experienced a 50-day rolling loss. This kind of response is quite abnormal and indicates the vulnerability of the market. As such, a trader who is investing should be aware of the risks involved in the Indian stock market.
One important factor that most investors do not consider is the brokerage account that they will be using for their investments. When it comes to trading shares, brokerage accounts are absolutely mandatory. The brokerage also provides various other services like buying and selling shares. These services are available at a fee and are called dealer commissions.
These commissions can range from five to fifteen percent of the number of your total investments. For example, if you invest ten thousand dollars in Indian stocks and you want to buy another four thousand shares, you would need to pay for the services of fifteen percent of your investment.
In order to have access to these kinds of services, an investor should have at least an active trading account with a reputed brokerage firm. Most investors do not want to pay this high amount of commission since it is only meant for small trades. In other words, trading large amounts of money in the stock exchange requires a significant amount of capital. People who are looking forward to investing small amounts in Indian stocks can choose the trading options through online portals.
Investing through mutual funds is also one of the best ways of investing your money in the stock market. A lot of money is invested in mutual funds each year. However, investing through mutual funds is only recommended for people who don’t have a good knowledge of the stock market and related commodities. Even with this, investing through mutual funds is still a risky proposition. It involves a lot of calculations and interpretation of information which is difficult for beginners and people without a lot of experience.
Most new investors do not want to pay a lot of commission just to buy and sell stocks. Therefore, they prefer to invest through penny shares or small-cap stocks. This is also considered a very good option for investors who are looking forward to investing a smaller amount. The price of these shares is cheaper than the others and this allows new investors to buy a larger number of shares at a time. There is absolutely no commission involved in this type of trading.
There is also a rise of discount brokers like Zerodha, Upstox, Fyers which offer low brokerage on trading. One can opt for these brokers as well. There are various brokers available in the country and investing through them can be safe as well.
Most of the brokers in India are registered with SEBI and are authorized by SEBI to trade in the country. Investors can invest through a broker or through an internet portal for Indian stocks. These brokers are well aware of all the investment options and can guide investors accordingly. Some of the best brokers in India are Aabundis Asset Management, CMS Financials, Energy Retail Securities and Trading, KPMG India Ltd, Future Trading Commission, and TradeKing.
The SEBI regulates all the transactions regarding foreign investments in India. This makes it easier for the investors to make investments and profits. If you are planning to start investing in stocks in India then you should consult a broker and get the required information regarding India investment options. A broker can help you find the right kind of investment opportunities and can even provide you information about the brokerage services that he/she offers.
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