How to invest in stock market?

Padmaja Choudhury   /   July 1, 2022

An easy-to-understand, complete step-by-step guide on how to start investing in the stock market, mutual fund and PMS.

 Are you interested in earning more money through investing? But aren’t sure where to start? Want to know how to invest in stock market?

If you are concerned about the risks associated with investing in choices such as stocks, mutual funds and Portfolio Management Service(PMS), then this guide is for you.

Key Steps in How to invest in stock market


Buying stocks directly can be scary, especially if you have never invested in stocks before. So many variables—price, volume, market cap—mean so little to someone who does not understand how the stock market works. But it does not have to be intimidating!

Here’s a quick guide on how to invest in the stock market:

1. Do your research! Look up companies that interest you, and find out what they do, how they make money, and their valuation. It is good to know their names and at least a little about their industry. But do not make the mistake of doing too much at once.

2. Find a broker for trading stocks online. You’ll need an account with a brokerage firm to purchase stocks directly from them. There are two types of brokerage firms: discount brokerages and full-service brokers. Discount brokerages charge a flat fee for every transaction. On the other hand, full-service brokers offer transactions and research reports.

It would be a good idea to shop around and shortlist the brokerage that matches your requirements.

3. Once you have an account with one of these brokers, you can buy stocks directly from them as often as you like. All you need is to log in with your account details and make your transactions.

Related article: What’s the best way to invest in stocks? Invest directly or through mutual funds

Mutual funds

Mutual funds are a great way to invest your money, but knowing where to start may not be very clear. Here’s everything you need to know about mutual funds.

Mutual funds are investment companies that pool money from many people and invest it on their behalf. They allow investors to purchase units of the fund, which represent a portion of the underlying assets owned by the mutual fund company.

First-time mutual fund investors must first complete the one-time KYC process. After completing your KYC, you can participate in any fund without undergoing additional verification for each transaction. You can either go to a distributor or investment advisor or perform e-KYC online to complete the KYC formalities.

Once your KYC has been verified and you are ready to invest, you can choose to do so with the assistance of a bank, registered investment advisor, stock market broker, mutual fund distributor, or another financial intermediary. However, if you want to invest on your own, you can go to the fund house’s nearby office, their website, or any online platform.

If you are interested in investing in mutual funds, here’s how you can start:

Decide on your investment objective: Mutual funds are different from other investments because they have different objectives. Some are designed purely for capital appreciation, while others focus on income generation. Therefore, you need to understand your investment objective before deciding which fund to invest in.

Choose a scheme: Once you have chosen the fund category that suits your needs best, choose one or more schemes that suit your requirements best.

Portfolio Management Service

An investment portfolio that includes stocks, debt, and other securities and is overseen by a qualified money manager is known as a Portfolio Management Services. It is and may be customised to match specific investment goals. In contrast to mutual fund investors, who own units of the entire fund, you own individual securities when you invest in PMS. You are free and able to modify your portfolio in accordance with your financial objectives and personal preferences.   According to SEBI regulations, only organisations that have registered with SEBI to offer PMS services to clients may do so. The minimum investment needed to start a PMS account is Rs. 50 lakhs, under SEBI regulations.

A Demat and a bank account are opened in your name if you choose to invest in a PMS scheme. These accounts are used for all upcoming transactions in your name. The investment’s dividends are credited to this bank account. In a similar manner, the shares acquired are moved to the Demat account. This indicates that you hold each of your stocks separately.   You would receive a daily evaluation statement of your portfolio from your portfolio managers.

There are two ways to invest. One way is by cheque, and another is by transferring the client’s current shares from their Demat account. In addition, the client must sign paperwork such as a power of attorney, Pan Card, and address proof, among others. 

The SEBI permits PMS Providers to levy either fund management fees or performance-based profit sharing, but not both.

The yearly fund management charges, which are typically deducted from the PMS Account on a quarterly basis, fall between the range of 1-3%. However, it could vary across service providers.

If the performance of the plan surpasses a predetermined threshold, the portfolio managers may also share in the scheme’s earnings. 


Investing can be a scary venture to undertake, but it doesn’t have to be. If you remember the old adage that “nothing ventured, nothing gained,” and keep the above-given tips in mind, then you are well on your way to becoming a successful investor.

While it’s possible to do all of these things on your own, you may want to consult a financial advisor to help you navigate the process. The advisor can also help you choose an investment plan that’s right for you; better yet, they can help free up some time that would have been spent researching to learn more about other aspects of the financial market.

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