Understanding Indian stock market

Mark Twain once said “The world is divided into two kinds of people, those who have seen the famous Indian monument Taj Mahal and those who haven’t.” The same can be said for investors, there are two kinds; those who know about investment opportunities in India and those who don’t.

India may look like a small dot to someone sitting in the U.S, but on a closer inspection you will find similar things one would expect from any promising market.

Photo Credit: http://trak.in/tags/business/2013/01/04/small-investors-stock-ipo-investment-sebi-refund-plan/

Here’s a quick outline of the Indian stock market and opportunities for investors to gain exposure.

How to begin investing?

In India, there are two primary exchanges: the NSE (National Stock Exchange) and the BSE (Bombay Stock Exchange). In order to trade you will require a demat account and a trading account, both available with leading stock brokers. Trading account is used when you buy a share to transfer money out of your bank and direct the share in your demat account. Demat account is used when you sell the share to transfer the share from your demat account to the

stock market.

Types of trading!

There are two types of trading: Intraday trading and Delivery trading.

• Intraday trading: you must buy and sell your shares in a single day
• Delivery trading: involves buying shares on a market day and selling them only after receiving delivery of those shares in demat account.

How much to invest?

The amount you should invest depends on how much financial risk you can endure. Also, don’t put your savings in a jeopardy. As the old saying goes “Cut your coat according to your cloth.”

Do your research

Base your investments on proper research and analysis of the company as well as the market. Before signing any deal with a broker, make sure it is registered with SEBI and ensure its credentials support its claims.

The lure of so called “fast money” has always drawn investors towards the stock markets. However, making money in equities in not so easy. There is no such thing as “fast money”. Investment in stock requires tons of patience, loads of calculated risks and a sound understanding of the market. In addition, the current unpredictability of the stock market has left investors in a state of confusion.

We at CEDRUS WEALTH PARTNERS anticipate, understand and proactively solve your financial and investment planning problems by helping you in wealth creation, risk management and tax efficiency.

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