Last Updated on
Markets on a high!
Recently in April 2017, the NSE benchmark, Nifty 50 hit a new high of above 9250. The BSE benchmark, Sensex hit 30,000 levels. There is lot of optimism due to factors like stable Government, Government’s pro-business and reform agenda, favourable macro-economic factors, low interest rates, good monsoons etc. These factors are translating into listed companies delivering good financial results. As India’s economy is expected do well in the coming years, equities are expected to deliver good returns in future.
Other asset classes not doing well
Fixed income instruments: With interest rates at multi-year lows, bank FDs and other fixed income instruments are not much appealing.
Real estate market has been stagnant for some time and expected to continue so.
Gold prices are stuck in a band of Rs. 28,000 to Rs. 30,000 for quite some time now.
With equities doing well and other asset classes not delivering expected returns, there is a strong case for investing in equities.
To get started, you need a trading and demat account. Approach a SEBI registered and licenced broker like Angel Broking or any other broker and submit:
- Duly filled account opening form
- Know Your Customer (KYC) documents: Photograph, identity proof (PAN Card) and address proof
With the advancement in technology, the account opening can be done online also.
Trading account
On account activation, you can start trading / investing. You can buy / sell equity shares through your trading account. Brokers provide real time information to help you make quick decisions. Apart from equity shares, your trading account is a platform for trading / investing in various other securities like:
- Derivatives (futures and options),
- Gold Exchange Traded Funds (ETFs) and other ETFs,
- Currencies,
- Commodities,
- Bonds and debentures,
- Mutual fund units etc.
You can also use your trading account to apply for Initial Public Offers (IPOs - shares of new companies).
Buying / selling of shares can be done through broker’s office, telephone, broker’s website, mobile app etc. Some brokers also allow you to place orders during off market trading hours. These orders get executed when the market opens for trading.
The trading account can be used to view your portfolio, profit & loss reports and other reports. Some brokers also provide research reports for informed investment decisions.
Demat account
Once you place an purchase order through your trading account, the shares are credited to your demat account. A demat account is an electronic account provided by depositories like NSDL and CDSL. It provides a safe and secure way of holding securities in electronic format for the long term. You can view your securities’ holdings anytime / anywhere. Through a consolidated demat account report; you can view all your securities (shares and others) at one place. So a demat account provides convenience.
When you place an order to sell your shares, through trading account, the shares are deducted from your demat account.
Now that you know all about a trading and demat account, you can open your demat account and start trading in 1 hour.