Muhurat Trading: Can you invest without a demat account during the auspicious hour today?

Those who intend to invest in stocks today during Muhurat trading are looking forward to adding stocks to their portfolio for a long-term investment. Muhurat trading refers to a special session of trading that takes place on the evening of Diwali. This trading session typically lasts for an hour and is considered auspicious.

“Muhurat plays an important role for Indians as we believe that whatever good things we start or do on Muhurat will grow and prosper in the future. Investors have the same belief in share market investments,” says Preeti Zende, Founder of Apna Dhan Financial Services.

It is believed that trading during this time can bring good fortune and prosperity. The session usually takes place after market hours on the day of Diwali and is marked by increased participation from retail investors.

As we know, one needs a demat account to invest in stocks. And those investors who don’t have a demat account can still invest in stock markets via mutual funds.

These are the steps to follow to buy mutual fund units:

I. Visit the mutual fund house website. Enter your login to enter.

II. After logging in, you can click ‘transact’. It will open a dropdown menu with lumpsum/SIP options.

III. You can choose the scheme in which you have already invested. Else, you can add a new scheme to invest in.

IV. After choosing the new scheme, you need to choose the category (equity, debt, index, fund of funds, hybrid liquid, overnight, etc) and scheme.

V. Enter the amount to be invested. There should be a minimum investment of ₹5,000 in the case of lumpsum investment or ₹100 in the case of SIP. Do not forget to opt for the number of SIPs.

It is, however, worth mentioning that Muhurat trading is meant to buy stocks and gold and not necessarily for mutual funds.

“The Muhurat trading is essentially to buy stocks, gold and ETFs, and not for mutual funds. Investors attach a lot of sentimental value to this particular time. There are emotional reasons to buy stocks during this period. This is the time to worship the goddess Lakshmi. Around 80 per cent of the time, trade is positive during this time for buyers,” says Sridharan S, a Sebi-registered investment advisor and Founder of Wealth Ladder Direct.

Those who don’t want to risk investing in stocks can get exposure to gold ETFs or Nifty 50 ETFs via the fund of funds (FOFs) route.  

“Most investors buy direct stock in the one-hour window on Laxmipujan day, but those who do not want to take direct equity investment risk can buy MF units as well. For the sake of custom, one can invest in the MF, but units will be credited as per scheduled days (T+2). So, if the idea is to buy on the same day and also to avoid direct stocks, one can invest into Gold ETF or Nifty 50 ETF (via fund of funds),” adds Zende.