Why should I invest?
Prerequisite of the question, Where should I invest is! Why should I invest? Remember the days when you just got your first job – your father probably told you to open a recurring deposit account in a bank and make all your tax saving investments in provident funds. After all, who would give you assured returns with a capital guarantee? Those were words of wisdom, then, but not anymore. Times have changed and how!
Inflation is eating away your returns
Today, inflation is eating into your returns even as you sit here reading this. If your monthly expenses today are Rs 15,000 and annual inflation is at 5%, 20 years later, when you will probably retire, expect your monthly expenses to rise to at least Rs 39,000. Bank deposits will give you a return of 6%, but post inflation and tax; you will be left with a rate of return which runs into the negative. This means that while on paper your returns look a healthy 6%, your capital is actually eroding in the real world.
You are going to live longer
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This is an absolute beginner guide for investing in stocks
In order to start investing in stocks.We need to buy and sell stocks of a company. You require two things:
1) Demat Account:
In the early days, we had to store physical copies of our share certificates with us.
Now stocks and other securities like debentures, bonds, government securities, units, etc. can be stored electronically in a Demat (de-materialized) account.
In India, we have two depositories, central depository service, Limited (CDSL) and national securities depository limited (NSDL).
An investor cannot directly open an account with them but has to use the services of depository participants (DP), to open a Demat account.
List of documents required for opening a Demat account is given below.
Proof of Identity: PAN card, driver’s license, passport, voter card etc.
Proof of Address: Ration card, passport, drivers license, voter card, landline telephone bill not more than 2 months old etc.
Passport size photo
Pan card copy
2) Trading Account:
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