Why Stock Market And Demat Account Is So Important?

The common perception is that the stock market and Demat account or the commodity market is a gamble. Money sinks here. It will work even if you get less money, but don’t gamble by investing in the market. Based on this one thought, the majority of people in our country are deprived of this market.

Out of 136 crore people in our country, only 5.25 crore Demat accounts have been opened in January 2021. During the Corona epidemic, a large number of 1.5 crore Demat accounts have been opened. Only 25% of Demat accounts are active. The remaining 75% of accounts do not transact.

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Indian Stock Market Journey

If we look at the history of the stock market, the Sensex of the stock market, which started at Rs. 100 / – on April 1, 1979, has reached 52,500 / – in April 2021. The total average return for these forty years is 16%. This means that the money invested in the Sensex have doubled in four and a half years. No other asset has offered such a good return, only a handful of people have become rich by investing in this market. But it is true that some people who have made money have suffered to some extent.

Why People Loose Money In Stock Market?

In general, the majority of people have lost money. If we look for these reasons, we can see the following reasons.

Investment is made with partial knowledge about the market.
The second is that investments are made for the purpose of making a big profit in the short term.
The shares are taken at the behest of someone.

This behavior leads to investing in the wrong company and causing huge losses if the shares fall. This means that if you drive on the road without knowing how to drive, you will definitely have an accident and you will have to suffer a loss.

10 Basic Thing you should know Before in The Stock Market

If you want to make a profit by investing in this market, you need to know about the market.

When investing in the market? you need to know the details of the company you are buying.
What is the business of that company?
Is that business in demand in the future?
What is the market capitalization of that company?
What is the EPS of that company?
How is the P/E ratio?
What is ROC ratio?
How much is the promoter holding?
What is the ratio of debt to assets in the company?
Is the company consistently making a profit? 1st Learn these basics. Then invest in that company.

We invest in stocks, we invest in a business. Your share feels like that business is growing. You need more than luck to succeed in affiliate business. If you look at the history of the top 50 companies in our country for the last 25 years, it has increased by an average of 18 to 26%. People who invest in such places seem to have become millionaires.

Stock Market Returns

In fact, many are unaware that investing in this sector is long-term. Most people take out a traditional insurance plan for 20 to 25 years. Never look at it, where you get 5 to 6% return, where it takes 12 to 14 years for your money to double. This means that today’s value of Rs. 10,000. This mentality of investors seems to be wrong.

If you take a long time to invest in the stock market; With a minimum return of 15% and a maximum return of 25%, the amount doubles in four to six years. So today the investment made in Rs. 10,000 / – shares is Rs. 320,000 / – in 25 years. This is the way to create wealth, and the common man should rely on it.

What is Demat Account?

In the past, delivery of shares was done in the form of paper certificates. Shares & securities are held in electronically in a Dematerialized or Demat account. The certificate is no longer issued.

Benefits of Demat

There is no fear of bogus certificates as the shares are available in Demat form.
No worries about losing shares.
You do not have to wait long to sell the shares as the shares are transferred immediately. Can sell shares immediately if needed.
Can sell any number of holding shares at any time.

Demat Account Opening Procedure

To enter the stock market, you first need to open a Demat account. The following documents are required to open a Demat account.

PAN Card
Passport
Ration card
Driving License
Bank account & six month bank statement
Electricity or land line telephone bill.
Voting card

Demat account opening is simple procedure, you have to open a Demat account with a SEBI approved broker.

Choose a reputable and well-known Stock broker.
Submit Required documents along with application form
Now online account opening is also enable (Takes only 10 minutes)
Demat account is created in your name after fulfilling KYC.
Link Your bank account with Demat account.
You have to pay a check or pay online to the broker for the amount you want to invest.
This amount is credited to your Demat account after the money deducted from your bank account.
The amount deposited by the broker into your account appears.
Once a Demat account is opened, the account holder can also deposit money online.
You can then buy or sell shares of any company from your Demat account.

Note: Whenever you give a cheque to a broker, you should make sure that the amount is credited to your account. If money is not credited to your account, report it immediately. If your broker does not take note of the complaint, you can report it to the service. A stock broker cannot sell or buy shares without your permission.