Over the last few days, border skirmishes between India and Pakistan have dominated the headlines. With Imran Khan agreeing to free the IAF pilot in Pakistani custody, it should certainly ease tensions. Nobody wants a full-fledged war; especially the stock market, since it hates uncertainty. As the tension thaws on the Indo-Pak border, the big question is what happens to the Indian markets? Two things are expected to happen immediately: 1) the volatility will come down and 2) foreign investors are likely to get more interested in Indian stocks.
In the past, Indian markets have always done exceedingly well after a state of war. The 1991 rally started after the end of the Kuwait War; the 1999 rally started after the Kargil War and the 2004 rally got a leg-up after the American war in Afghanistan. In a nutshell, the India story is intact, and the time may be ripe to look at investing in equities, once again. If you aren’t investing in the equity markets, then now is the perfect time to make a start. It performs much better when compared to other asset classes like Fixed Deposits, gold, real estate, etc. in any five-year span. In short, a lot more households should be investing and trading.
Where do you start?
To invest in equities, you need a demat account. Defined, a demat account is an electronic holding account for your stocks and other financial securities. You can actually hold all your investments in a single account.
- When you open a demat account, you don’t have to worry about maintaining share certificates, sending the shares for transfer, handling bad delivery etc. Everything is automated and happens at the press of a button.
- Corporate actions become very simple in a demat account. Dividends are automatically credited to your bank account and other actions like bonus issues and splits & mergers are also automatically adjusted to your demat account.
- Unlike what many believe, a demat account is not just for holding equities. It can also hold stocks, ETFs, mutual funds, corporate bonds, RBI bonds etc.
- A demat account is also very economical in cost terms. Generally, charges for opening a demat account are rather low. When discount brokers like Upstox come up with schemes like their Free Demat Fest, you can open a demat account, completely free! They also offer flat Rs.20/trade, no matter what the volume. Even if you add up these costs, it is so much cheaper than trading shares physically. Also, the best bit is buying and selling through your demat account can happen at the press of a button.
Lastly, opening a demat account is quick and simple. You can either open it with physical documents or through e-KYC, using your Aadhar authentication. The demat account can be activated in less than 24 hours.
Since the time is right to invest, make good use of Upstox’s Free Demat fest. On from 1st–7th March, you get a free demat account. Once that is done, you can start investing small amounts to test and understand the market better. And even when you start trading in volumes, you end up paying just Rs. 20/order. That’s what I call a super return on investment. Happy trading 🙂