How can invest money in share market

There's quite a bit you should know before you dive in. Here's a step-by-step guide to investing money in the stock market to help ensure you're doing it the right way. The steps to investing might be better described as a journey. One core element of this journey is to continually invest money in the market. The first thing to consider is how to start investing in stocks. Some investors choose to buy individual stocks, while others take a less active approach. The good news is that regardless of which of these statements you agree with, you're still a great candidate to become a stock market investor.

The only thing that will change is the "how. First, let's talk about the money you shouldn't invest in stocks. The stock market is no place for money that you might need within the next five years, at a minimum.

Now let's talk about what to do with your investable money -- that is, the money you won't likely need within the next five years. This is a concept known as asset allocation , and a few factors come into play here. Your age is a major consideration, and so are your particular risk tolerance and investment objectives.

Let's start with your age. The general idea is that as you get older, stocks gradually become a less desirable place to keep your money. If you're young, you have decades ahead of you to ride out any ups and downs in the market, but this isn't the case if you're retired and reliant on your investment income. Here's a quick rule of thumb that can help you establish a ballpark asset allocation.

Take your age and subtract it from This is the approximate percentage of your investable money that should be in stocks this includes mutual funds and ETFs that are stock based.

The remainder should be in fixed-income investments like bonds or high-yield CDs. You can then adjust this ratio up or down depending on your particular risk tolerance.

For example, let's say that you are 40 years old. If you're more of a risk taker or are planning to work past a typical retirement age, you may want to shift this ratio in favor of stocks. On the other hand, if you don't like big fluctuations in your portfolio, you might want to modify it in the other direction.

All of the advice about investing in stocks for beginners doesn't do you much good if you don't have any way to actually buy stocks. To do this, you'll need a specialized type of account called a brokerage account. And opening a brokerage account is typically a quick and painless process that takes only minutes. You can easily fund your brokerage account via EFT transfer, by mailing a check, or by wiring money. Opening a brokerage account is generally easy, but you should consider a few things before choosing a particular broker:.

First, determine the type of brokerage account you need. For most people who are just trying to learn stock market investing, this means choosing between a standard brokerage account and an individual retirement account IRA. Both account types will allow you to buy stocks, mutual funds, and ETFs. The main considerations here are why you're investing in stocks and how easily you want to be able to access your money.

If you want easy access to your money, are just investing for a rainy day, or want to invest more than the annual IRA contribution limit , you'll probably want a standard brokerage account. On the other hand, if your goal is to build up a retirement nest egg, an IRA is a great way to go. IRAs are very tax-advantaged places to buy stocks, but the downside is that it can be difficult to withdraw your money until you get older. The majority of online stock brokers have eliminated trading commissions, so most but not all are on a level playing field as far as costs are concerned.

However, there are several other big differences. Insure Life Insurance. Health Insurance. Motor Insurance. Other Risk Covers. Personal Finance News. Mutual Funds.

Sunil Dhawan. Rate Story. Font Size Abc Small. Abc Medium. Abc Large. ThinkStock Photos In reality, risk and returns are inversely related, i. Related The best investments for daughter's education and marriage.

Most investors want to make investments in such a way that they get sky-high returns as quickly as possible without the risk of losing principal money. This is the reason why many are always on the lookout for top investment plans where they can double their money in few months or years with little or no risk.

However, high-return, low-risk combination in a investment product, unfortunately, does not exist. In reality, risk and returns are directly related, they go hand-in-hand, i. While selecting an investment avenue, you have to match your own risk profile with the associated risks of the product before investing.

There are some investments that carry high risk but have the potential to generate higher inflation-adjusted returns than other asset class in the long term while some investments come with low-risk and therefore lower returns.

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Investing Bad bet or value buy? Subscribe to ETPrime. Browse Companies:. Find this comment offensive? This will alert our moderators to take action Name Reason for reporting: Foul language Slanderous Inciting hatred against a certain community Others.

Your Reason has been Reported to the admin. Fill in your details: Will be displayed Will not be displayed Will be displayed. Investing is a means to a happier ending. Legendary investor Warren Buffett defines investing as "the process of laying out money now to receive more money in the future.

In this article, we'll walk you through getting started as an investor and show you how to maximize your returns while minimizing your costs. Before you commit your money, you need to answer the question: What kind of investor am I? When opening a brokerage account, an online broker like Charles Schwab or Fidelity will ask you about your investment goals and what level of risk you're willing to take.

Some investors want to take an active hand in managing their money's growth, and some prefer to "set it and forget it.

Brokers are either full-service or discount. Full-service brokers, as the name implies, give the full range of traditional brokerage services, including financial advice for retirement, healthcare, and everything related to money. They usually only deal with higher-net-worth clients, and they can charge substantial fees, including a percentage of your transactions, a percentage of your assets they manage, and sometimes, a yearly membership fee.

Still, traditional brokers justify their high fees by giving advice detailed to your needs. Discount brokers used to be the exception, but now they're the norm. Discount online brokers give you tools to select and place your own transactions, and many of them also offer a set-it-and-forget-it robo-advisory service too. As the space of financial services has progressed in the 21st century, online brokers have added more features, including educational materials on their sites and mobile apps.

In addition, although there are a number of discount brokers with no or very low minimum deposit restrictions, you may be faced with other restrictions, and certain fees are charged to accounts that don't have a minimum deposit. This is something an investor should take into account if they want to invest in stocks.

After the financial crisis, a new breed of investment advisor was born: the robo-advisor. Jon Stein and Eli Broverman of Betterment are often credited as the first in the space. Their mission was to use technology to lower costs for investors and streamline investment advice. Since Betterment launched, other robo-first companies have been founded, and even established online brokers like Charles Schwab have added robo-like advisory services. If you want an algorithm to make investment decisions for you, including tax-loss harvesting and rebalancing, a robo-advisor may be for you.

And as the success of index investing has shown, if your goal is long-term wealth building, you might do better with a robo-advisor. The truth is, you probably won't even miss a contribution that small. Work-based retirement plans deduct your contributions from your paycheck before taxes are calculated, which will make the contribution even less painful. You're unlikely to miss the additional contributions.

If you have a k retirement account at work, you may already be investing in your future with allocations to mutual funds and even your own company's stock. Many financial institutions have minimum deposit requirements. In other words, they won't accept your account application unless you deposit a certain amount of money.

It pays to shop around some and check out our broker reviews before deciding where you want to open an account. We list minimum deposits at the top of each review. Some firms do not require minimum deposits. Others may often lower costs, like trading fees and account management fees, if you have a balance above a certain threshold.

Still, others may offer a certain number of commission-free trades for opening an account. As economists like to say, there ain't no such thing as a free lunch. Though recently many brokers have been racing to lower or eliminate commissions on trades, and ETFs offer index investing to everyone who can trade with a bare-bones brokerage account, all brokers have to make money from their customers one way or another.

In most cases, your broker will charge a commission every time you trade stock, either through buying or selling. Some brokers charge no trade commissions at all, but they make up for it in other ways. There are no charitable organizations running brokerage services. Depending on how often you trade, these fees can add up and affect your profitability. Investing in stocks can be very costly if you hop into and out of positions frequently, especially with a small amount of money available to invest.

Remember, a trade is an order to purchase or sell shares in one company. If you want to purchase five different stocks at the same time, this is seen as five separate trades, and you will be charged for each one.

If your investments do not earn enough to cover this, you have lost money just by entering and exiting positions. If you plan to trade frequently, check out our list of brokers for cost-conscious traders. Besides the trading fee to purchase a mutual fund , there are other costs associated with this type of investment.