StockShare Market

How to Start Buying Stocks?

How to Start Buying Stocks

If you’re thinking of starting to invest in stocks, or maybe you’ve been doing it for years, you’ll likely want to know how to buy stocks. Here are some tips on how to buy stocks the right way, so that you can make the most of your money and achieve long-term success.

How does the Stock market work?

How does the Stock market work

The stock market is a democratic system in which people buy and sell shares of companies. The price of these shares reflects the opinion of the public about the company’s future performance.

When there is good news about the company, the stock price goes up. When there is bad news, the stock price goes down. Public companies list their stock on the open market and are required by law to offer shares at a public offering price. This price is determined by the supply and demand of shares on the stock market.

New investors, known as “market participants,” buy or sell shares based on their expectations about how the company will perform in the future. These expectations may be influenced by news articles, industry analysts’ reports, or personal opinions about individual companies.

The stock market is constantly changing because new information impacts the price of shares. This can happen quickly, often within minutes or hours after a company releases financial reports.

When to Buy Stocks?

There is no definitive answer to this question. Some people believe that it is best to buy stocks when they are undervalued, while others believe that buying stocks at a high price point is better because there is a greater potential for substantial returns over time. Ultimately, the decision of when to buy stocks depends on individual circumstances and goals.

Main Types of Stocks

Common stocks

Common stocks are the most common type of stock and are traded on a regular basis on exchanges. These companies typically have low price-to-earnings (P/E) ratios and offer investors relatively high dividends.

Preferred Stocks

Preferred stocks are special types of bonds that pay higher interest rates than common bonds, but they also have some protections, such as voting rights or dividend guarantees, that make them more attractive to certain investors than common stocks. A company issuing preferred stock is generally obligated to repay the bondholders first in case of bankruptcy or another financial emergency, which makes these securities less risky than common stocks.

How to Start Buying Stocks?

  1. Obtain a PAN (Personal Identification Number) from your bank or brokerage account provider.
  1. Open a DEMAT and Trading Account with the appropriate broker who will be providing you with the platform to access your stocks and ETFs.
  1. Select a broker and link the bank account with your Trading Account in order to have funds available to purchase stocks.
  1. Link your bank account IDs with PANs to further protect your account and personal information.
  1. Acquire an ID, such as a Social Security Number or Tax Identification Number, so that you can authenticate yourself when making stock purchases.

What is the Difference Between Stocks and a Bond?

What is the Difference Between Stocks and a Bond


A bond is a type of security that offers investors the opportunity to earn periodic payments over a predetermined period of time, typically ranging from one year to decades.

Buying a bond therefore involves locking in an agreed-upon price for the security at some point in the future and assumes that interest rates will not change between now and then.


Stocks, on the other hand, are traded on stock exchanges and represent ownership shares in corporations or other entities.

While owners of stocks may hope for increases (or decreases) in their share prices based on corporate performance, they do not receive periodic payments as dividends like bondholders do. Instead, stocks typically offer holders the potential for increased returns based on inflation or other factors.

The Purpose of Buying Stocks

The purpose of buying stocks is to make money by investing in a company’s future earnings. By owning shares, you are essentially agreeing to give the company permission to use your money to generate profits in the future.

You will also receive periodic dividends and other benefits as a shareholder, which can add up over time. The key to making money through stock investing is to choose quality companies with strong fundamentals.

Look for companies that have a solid track record of profitability, good leadership and management, and significant growth potential.

Once you have identified a few promising stocks, do your homework by reading corporate reports, financial statements, and analyst recommendations before investment decisions are made.

Common Mistakes People Make When Buying Stocks

There are a few common mistakes that people make when they buy stocks, and each of them can lead to big losses. Here are four of the most common:

  1. Buying stocks based on emotions rather than facts.
  2. Failing to do due diligence on the company or its stock.
  3. Invest money that you can’t afford to lose.
  4. Not having a plan for how you would sell or trade stocks if things go bad.


Buying stocks doesn’t come without risks, but there are some basic strategies that can keep them under control.

We too have designed a step-by-step guide on how to start investing in stocks. This helps you buy and hold the right stocks for years. So if you want to make your first investment by now, use our guide as a reference. And most importantly, don’t forget to keep calm and invest patience!

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