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Know All About Buying Your First Stock

Publish Date: June 12, 2019

By: Sandhya Kannan, Head – Content

You may have wondered how to invest in share market. But then you opted for mutual funds or unit-linked insurance plans (ULIPs) instead.

Investing directly in the stock market is a different ballgame. So, how do you do it?

First, make sure that you have the following:

  • A demat account
  • Surplus income

Demat account

A demat (or dematerialised) account is mandatory for investing in the stock market. All shares are held in a dematerialised or electronic form. This means you don’t have to worry about physical share certificates. An electronic certificate is issued and stored in your demat account.

You have the option of getting a broker. You could also trade independently on a share trading site.

Choosing a stock

There are many listed companies whose products and services are well known and widely used. Is a particular product or service doing well in the market? Check up on the company that’s providing it. Acquiring stocks in such a company may be a good idea.

Related: 3 stock-picking strategies that you need to avoid

Analyse and invest

There is no end to the amount of analysis you can do. So, give yourself a time limit. This could be a day, a few days, or even a few weeks. If it seems like a good prospect, go ahead and buy your first stock.

How much should you invest? It is best to start small. If you are comfortable investing Rs 10,000, then do so. You can buy shares in a single well-known company or invest in five different companies.

Related: Minimum money required to start stock trading

Handling losses

It may happen that the stock price dips right after you buy the first stock. But keep in mind that stock prices change daily.

If a stock is doing well, the price may go up in time. You can then sell the stock to generate your first profit.

Related: How to calculate earnings from the stock market


To profit from your stock market investments, you must keep abreast of company results and overall market trends. It may help to open a trading account with Kotak Securities. You then get access to the latest market research, expert advice, and much more.

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