By Prajakta Pingulkar
Share market for beginners is a whole new territory to explore. The market speculation going throughout the year puts many new investors into confusion as to which stocks are most reliable to invest in. While there is no 100% reliable method to select funds absolutely securely, there are ways to make the best bet.
The union budget’s impact on the share market can be highly decisive for beginners. The union budget for the year 2021 is one thing you as a beginner should keep an eye on. It will help you understand the sectors where the government is going to be spending in the coming years. These sectors, therefore, will see heavy funding from the government as well as from the private players. The stocks concerned with the union budget have a much better chance of growth and returns. Thus, the share market for beginners can become more accessible once they figure out which sectors are likely to be supported by the government.
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Sectors To Look For
If you are planning to invest this year then there are stocks which the government is providing extra emphasis on. With the COVID-19 pandemic hitting the global market last year, the share market has witnessed a massive dip in its performance. While the new vaccines are making their way, the market will take some time to grow. For this reason, the government is focusing on healthcare sectors all the more. Since the need for healthcare infrastructure is most needed not just to cope with this pandemic but any such health crisis in the future, the healthcare stocks are going to be the most focused upon in the coming years.
Other sectors under the investment radar will be automobiles, consumer durables, and agriculture. Therefore, the share market for beginners can be really profitable if their focus stays on these sectors.
The important thing to keep in mind is that the price of the shares may also be affected due to the union budget, so invest only if you are determined to. Also, time is an important factor here. You cannot expect your shares to give you instant profit immediately. The government has decided to invest in these sectors and it will surely take time for them to grow. Hence, patience remains the key.
Important Things To Look Forward To In the Union Budget
There are numerous speculations on what the union budget for 2021 can bring to the share market. Some of them are as follows
- New IPOs are going to enter the market. But if experts are to be believed, only top-level businesses are most likely to retain their valuation and will also have the best chance to do well in the future. A new investor should take into consideration all the factors such as the quality of the business, its valuation, the board of directors, etc before deciding to for the IPO.
- The Nifty Bank investors should secure the long future as the global market can create unforeseen volatility irrespective of how the Indian market performs.
- Infrastructure, manufacturing, and agriculture are to remain among the most dominant of all sectors. Investors from all over the globe will be bullish on the Indian market and could provide funds for the said sectors. Agriculture can also be a game-changer this year as the government looks forward to increasing productivity and provide fertilizer subsidy
- Sensex and Nifty have seen a considerable rise in the past few months. The growth may not be as sporadic but will still likely remain to be near the high range.
By keeping track of the market trends, young investors can benefit greatly. Follow the expert analysts’ views on which stocks to invest in and with the right approach you can get the best from the stock market.
Requirements For Investment In The Share Market For Beginners
Share market for beginners is not just an investment. There are other important things which you need to know about in order to make optimum utilization of your investment. As a beginner, you must get cleared the following points for investing in the share market. In a nutshell, you should get prepared to dive into the money market post-2021 Union Budget announcement. Hence, let us start with the preliminaries.
Documents Required to Open a Demat Account
- PAN Card
- Aadhar Card
- Passport size photograph
- A canceled cheque in your name
- Bank statement or salary receipt showing your income
One of the most important things in the share market for beginners is to have a Demat Account. The Demat Account refers to a type of account in which you hold your shares, bonds, ETFs, mutual fund units, etc in a digital or electronic format. The Demat Account uses the process of dematerialization which converts your physical stocks into a dematerialized form.
The Demat Account is a must if you want to invest in the stock market. It will enable you to keep your shares secured. The Demat Account can also be used to monitor the performance of your shares and much more.
You can open a Demat Account with the help of a Depository Participant or DP. The DP will connect you with the depository with which you have opened your Demat Account.
One of the common misconceptions the share market for beginners manifests is the difference between the Demat Account and the trading account. The trading account is used to transact in the share market. Whether it is to purchase or sell, you will need a trading account for the transaction to take place.
The trading account cannot store your securities. It is only to trade in the market. That’s why a Demat Account is also required so that you can store your shares after the transaction. What the trading account rather needs is a bank account that will furnish you with the funds involved in buying or selling the shares.
The union budget can make a decisive turn in the stock market. But the share market for beginners should not just be about where to invest but how to invest as well. Hence, the best thing you can do is to keep a look at both the union budget as well as on the other technicalities involved in the share market.
(Disclaimer: The article is sponsored and, hence promotes some commercial links.)