You can see different information about your securities and transactions when you log in to your demat account. The ledger balance displays the total value of your holdings as recorded by your depository participant (DP) at any given time. In simple terms, it is the total amount of money you have in electronic securities like stocks, bonds, and other instruments. This balance shows all of your completed transactions, adjustments, and corporate actions, giving you a full picture of your current portfolio.
The ledger balance is a crucial number that you use to figure out how much money you have, plan your trades, and see how your portfolio is doing. The ledger balance in your demat account solely pertains to your securities and aids in closely monitoring the performance of your investments. It is different from the balance in your bank account.
As soon as you buy or sell securities, get dividends, or go through corporate actions like splits or bonus issues, the balance in the ledger changes right away. To make smart choices, you need to know what your investment is worth right now, which is possible because it is constantly changing.
The following details comprise the ledger balance:
- Purchased Securities: You have invested money in Stocks, Bonds, Mutual Funds, and other Financial Products.
- Corporate Actions: If the value of the securities you own changes because of splits, bonus shares, dividends, or other corporate events.
- Transaction Adjustments: These are modifications made to your account due to additions, deletions, or corrections.
These things will help you record your transactions correctly and check your ledger balance. Monitoring the balance in your ledger can enhance your understanding of your finances.
Here's what you can do to make the most of this information:
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Review of Your Portfolio:
You can look at the balance in your ledger from time to time to see how your investments are doing overall. By doing this, you can see patterns and determine which stocks are performing well or poorly.
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Risk management:
To figure out how risky your portfolio is, you look at how the balance of your ledger has changed. If you see a lot of volatility, you might want to rebalance your portfolio or spread out your holdings to lower your risk.
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Smart Trading:
By checking your ledger balance, you can figure out the best times to enter or exit trades. By monitoring changes immediately, you can make more informed trading decisions based on the performance of the market.
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Planning your finances:
The balance of your ledger can help you set long-term goals for your money. Knowing the balance of your ledger is crucial when making plans, such as increasing your investments, merging your accounts, or changing your investment strategy.
When you log in to your demat account through your broker's web or mobile app, you should check your ledger balance. Aside from showing the current balance of the ledger, most platforms also have a full dashboard that shows your holdings, transaction history, and recent corporate actions. The way you trade and invest depends on these numbers, so you need to make sure you pay attention to them.