How to start investing in the share market and mutual funds?

How to start investing in the share market and mutual funds?

There are a whole lot of essential things that you need to know before you make a final decision to invest in a stock in the share market. Investing in shares helps you to improve your financial condition and accomplish your goals effectively. If you are in need of money, then consider making an investment in the share market.

Importance of share market

Share market is the place where purchasing and selling of shares take place. You acquire a portion of the ownership by buying a stock of a company. Whenever the company drives considerable earnings, you will also receive a portion of the profit, and do remember that it could be a lot of money when the company performs well and drives excellent revenue every three months per year. If you start to invest from the early ’20s and keep on making investments for an extended period, you will be able to drive a high return and fulfill the majority of your dreams. You have to know how to invest in shares for improving your investing performance and driving significant benefits.

The price of the stocks of different companies goes up and down throughout the year in the share market. Hence, you should take a good note of the companies that are performing well and have a higher stock value. If you make a sound decision every time when you trade stocks, you will be able to make yourself wealthy in a quick time. With the growth of the company, your share price will also increase simultaneously. Making investments in Axis Long Term Equity Fund can be fruitful for you as an investor to invalidate the fall in the cost of the stock. Even if you want to sell the shares, you can do so when the share price is high in the market and earn a significant amount of profit.

Primary types of share market

The stock or share market is of two types – Primary market and Secondary market.

• Primary market

According to the procedure of Initial Public Offer (IPO), a company issues shares in the share market to raise money for its development and growth. Through private and public placement, the issue can only take place. The issue is private when the shares are allotted to less than 200 individuals, and becomes public when shares allotment is more than that. The prices of the stocks primarily based on the Fixed price or Book building case.

• Secondary market

When investing in the share market, you can get the facility of selling the share of the primary market in the secondary market. Investors trade previously issued stocks among themselves in the secondary market. You can buy and sell shares as many times you want, which is not possible in trading stocks in the primary market.

How to invest in the stock market?

You will be able to accumulate a notable amount of money by buying and selling shares in the share market. Knowing the primary steps that are mentioned below would help you significantly to invest in stocks successfully.

• Start making investments, knowing your end goals.
• Create a results-driven strategy before investing in shares.
• Get in-depth knowledge by reading books on share market investing.
• Make the right choice when it comes to selecting your broker.
• Before investing, conduct extensive research on the share market.
• Ensure that you keep track of your investing performance by selecting a productive platform like Google spreadsheets.
• You should also know when to exit stocks in the share market.

How to invest in mutual funds?

By investing in mutual funds, the money invested by the investors is used by the mutual fund manager of an asset management company in buying stocks, shares, bonds, and other forms of investment. There are multiple ways in which you can make mutual fund investment and drive high returns successfully.

• Investing in mutual funds offline directly with the fund house
• Invest offline by taking comprehensive assistance of a reliable broker
• Make online investment by leveraging the official website of the fund company
• Make use of a mobile application for investing in mutual funds

Major types of mutual fund

The major types of mutual funds are categorized primarily on the basis of fund structure, objectives of the investment and schemes’ nature. However, to get hold of the Best mutual funds to invest in, you need to have explicit knowledge of the objectives before making an investment in mutual funds. As per the investment objectives, the mutual fund is categorized into several types – equity scheme, fixed-income funds, tax-saving funds, balanced funds, and exchange-traded funds. Based on the fund structure, a mutual fund is of two significant types – open-ended scheme and close-ended scheme.

Key points that you should keep in mind before investment

It is imperative to conducting comprehensive research on mutual funds and becoming aware of the schemes available. Taking the steps can aid you significantly in choosing the ideal type of Mutual funds to invest in and augmenting your financial growth. The below-mentioned points are extremely crucial, and you should keep in mind before making a final decision.

• You should know your goals and invest your hard-earned money accordingly to drive profitable returns.
• To become an investor, you need to adhere to the KYC guidelines before you start investing in mutual funds
• Gain comprehensive knowledge about the mutual funds’ schemes available that best meet your needs. HDFC small cap fund direct growth can significantly facilitate you in driving a high return effectively over time.
• Keep the risk factors in mind before choosing a mutual fund scheme.

Ensure that you keep a close eye on the share market and the way it fluctuates. Also, if you are interested in investing in mutual funds, then make yourself aware of the present conditions comprehensively. If you take the right steps at the right time, as an investor, you will always stay ahead of other investors in the market and make yourself a wealthy person