FAQ
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The stock market is where people buy and sell shares of companies. For example, if you buy shares of a company like Reliance Company, you become a part-owner of Reliance. The market helps companies raise money from investors and allows investors to potentially profit from the company’s growth or receive dividends.
No, you cannot. A Demat account is essential for holding and trading shares electronically in India. It acts as a secure repository for your stocks, replacing the traditional physical share certificates. Without a Demat account, you cannot participate in buying or selling shares on stock exchanges in India.
Yes, NRIs (Non-Resident Indians) can open a Demat account in India. The process involves submitting certain documents and complying with regulatory guidelines. For detailed information on the NRI Demat account opening process, please refer to our blog on NRI account opening procedures.
Investing in equities (stocks) has historically been one of the best asset classes for achieving high returns in India. Over the long term, stocks have outperformed other asset classes like bonds, real estate, and gold in terms of capital appreciation. However, stocks also come with higher volatility and risk.
In the stock market, a “bull market” refers to a period when stock prices are rising or expected to rise significantly driven by optimism and economic growth. Conversely, a “bear market” describes a period when stock prices are falling or expected to fall significantly due to pessimism and economic downturns. These terms are used to describe the overall direction and sentiment of the market, influencing investor behaviour and market dynamics.
Equity investments involve buying shares of ownership in a company, giving investors a stake in its profits and losses. Debt investments, on the other hand, involve lending money to a company or government in exchange for periodic interest payments and repayment of principal.
Investment in Mutual funds are subject to market risks and do not guarantee returns. The safety of investments in mutual funds depends on factors such as the type of fund chosen and market conditions. Investors should consider their risk tolerance, investment objectives and read all the related documents to mutual fund scheme before investing.
NAV, or Net Asset Value, is the price per unit of a mutual fund. NAV is calculated at the end of each trading day and reflects the fund’s current market value per unit. It serves as a benchmark for investors to evaluate the fund’s performance and to determine the cost of buying or selling units in the fund.
Tax-saving investments in India include ELSS (Equity Linked Savings Scheme), PPF (Public Provident Fund), NPS (National Pension System), and ULIP (Unit Linked Insurance Plan). These investments offer tax benefits under specific sections of the Income Tax Act, such as Section 80C for ELSS, PPF, and ULIP, allowing individuals to deduct the invested amount from their taxable income. Each option varies in terms of lock-in periods, return potential, and suitability, providing tax-efficient ways to save and invest for different financial goals. It’s recommended to consult with a financial advisor to determine the most suitable tax-saving investment based on individual financial circumstances and objectives.
Inflation diminishes the purchasing power of money over time, reducing the real returns on investments. It often leads to higher asset prices and can influence interest rates set by central banks. Investors should consider investments that offer returns exceeding the inflation rate to maintain and grow their wealth effectively.