For a beginner the first question that comes to mind is how can I start investing in stock market? People who are not dealing stock market are always very hesitant and confused with the whole process of stock market investment. But in actual the process of stock market investment not difficult at all. It can be as easy like you sitting comfortably in your living room with laptop and few bucks in your bank account. You do not have to move an inch to buy and sell stocks. I was also very hesitant in the beginning to invest in stock market. Because I did not know the process, I did some extensive research on the internet and took steps one at a time. Today for last 2 years I am successfully investing in share market and it is so easy.
Steps required before start investing in stock market are:
1. Open a demat and online trading account
2. List down your investment goal (long-term or short-term investment)
3. Read articles on stock investment
4. Learn to pick good long term stocks
5. Learn to diversify your investment.
Opening of demat and online trading account is most east. Simply approach your bank and they will guide you how to open a new account. Banks like ICICI, HDFC, SBI has their own trading platforms. Other banks has collaborations with Geojit, India Infoline, Sharekhan, Reliance Money etc and can provide you the required service. It not take you more than a week to open a new trading and demat account. You have to do nothing, simpley approach your bank or directly any online broker (like ICIC, HDFC, Geojit, Sharekhan etc) your job will be done in a week. While opening your demat account, the company will ask for linking of one of your existing (or you can open new) savings account with the demat account. This linking will enable you to transfer money form your savings account to demat account whenever you like to buy stock. All this will be done by your bank or online broker. Please approach them.
People often make a mistake of starting investment without answering a simple question that why they are investing? It is not sufficient to say that for making more money you are investing. Instead you shall say that I am investing because I want to take early retirement in next ten year for which I need $250,000; I want to buy a nice house in next ten years for which I need $100,000; I want to buy a nice car in next two years for which I need $2,500; I want to some extra money for my child’s future for which I need $125,000 in next fifteen years. Such goals with specific value and time frames will help you to realize that how and when you need your money. As seen in the above example, all requirements are ten years form now except for car which is required only after two years. All goals that needs to be fulfilled after 5/7 years can be termed as long term goals. But less than that is a short term goal. Once you have classified your goals in terms of short/long term perspective and gives values and time frame; you are ready to think how you are going to make this money.
There are numerous websites that can feed you good know how on stock market investments. You can also subscribe to articles and magazines on stock investment. But the best will be to start your own small study on “Fundamental Analysis” of companies. Idea is to identify fundamentally strong companies and invest only in them. Remember the phrase “Buy stocks of fundamentally strong companies at discounted price”. Fundamental Analysis before stock investment is the key. Warren Buffett is the world’s most respected investor; he believes in fundamental investing. Picking stocks after fundamental analysis is to meet your long term goals. For meeting short term goals look for savings deposits, fixed deposits, debt linked mutual funds, bonds, post office savings schemes etc.
Investment diversification is important for beginners. As they are not expert in selection of only good companies at good price, mistakes are logical. Hence do not put all eggs in one basket. Try to invest some in direct stocks and some through mutual funds. Though diversification of investment is a very long subject but my advise to beginners is start slow, put your 75% investment in stocks through mutual funds SIP and balance 25% in direct stocks through online trading account.
You can read more here
- Stock Beta
- How to predict future price of stock
- Balance-sheet
- Best-stock-pick
- Book-value
- Book-value-of-shares
- Business-objective
- Business-performance-stocks
- Direct-equity-investment
- Discounted cash flow
- Dividend-option-and-short-term-capital-gain
- Financial analysis of stock
- Financial-evaluation-of-stock
- Hot-stocks-of-bse
- Hot-stocks-of-bse
- How-to-buy-long-term-stocks
- How-to-pick-a-winning-stock
- How-to-value-stocks
- How-warren-buffett-became-a-billionaire
- How-warren-buffett-selects-his-stocks-2
- Identify-exceptional-companies-for-stock-investment
- Identify overvalued stock
Related posts:
- Use Online stock market investment tools to your advantage
- Stock Market Investing: Timing the market
- How much to invest in stock market?
- Who would not want to invest in stock market!
- The twenty-four winning formula of Stock Market Trading
- Know the best Stock Market Investment Strategy of all times
- The dangers faced by the stock market analyst
- How to value current stock market prices
- Online Stock Market Investing Advice
- Stock Market Crash of 1929 & 1987
- Indian Stock Market Tips & Value Investing
- How to make money in the stock market
- How To Start Investing in Shares
- How to invest wisely $100 in stock market
- How to invest in the stock market
You got fantastic nice ideas there. I made a research on the topic and got most peoples will agree with your blog.
I found this post while surfing the net some random stuff. Thanks for sharing will be sure to follow this blog regularly and will email this post to my friends.
Hello, been following your blog page for a long time. I operate a related blogging site but I always keep getting tons of spam comments, how do you keep your blogging site so clean?
I really enjoyed this post. I can tell you put in a great deal of effort and time into this post. I will be back to read more as you post more!
Wow..very good…Nice blog and well updated…
Advantageously, the post is really the best on this precious topic. I concur with your conclusions and will eagerly look forward to your future updates. Just saying thanks will not just be sufficient, for the phenomenal clarity in your writing. I will instantly grab your rss feed to stay informed of any updates. Gratifying work and much success in your business dealings!
I really enjoyed this post. I can tell you put in a great deal of effort and time into this post. I will be back to read more as you post more!
My friend referred me to your blog, so I thought I’d come have a read. Very interesting material, will be back for more!
Hi there, awesome site. I thought the topics you posted on were very interesting
Wow..very good…Nice blog and well updated…
My opinion is a bit another how it is possible to talk to the author, for example on an e-mail?
cheers very much, I have to say your site is excellent!
My friend referred me to your blog, so I thought I’d come have a read. Very interesting material, will be back for more!
Hi there, awesome site. I thought the topics you posted on were very interesting. I tried to add your RSS to my feed reader and it a few. take a look at it, hopefully I can add you and follow.
I wish more people would write blogs like this that are actually fun to read. With all the fluff floating around on the net, it is rare to read a blog like yours instead.
Exceptional webpage. My class mates and I were just discussing this the other night. Also your webpage looks great on my old laptop. Now thats uncommon. Nice work.
Hi there, awesome site. I thought the topics you posted on were very interesting
Thanks for sharing, I will bookmark and be back again
Great blog on a very interesting subject. I hope you’ll write more on the subject in near future.
I feel far more persons will need to read this, extremely very good info.
Your blog is so informative ¡ keep up the good work!!!!
Just wanted to say you have a great site and thanks for posting!
Nice, i like your articles a lot and will be excited to read more
This article was very nicely written, and it also carries a lot of useful facts. I appreciated your professional way of writing this post. Thanks, you have made it very easy for me to understand.
Nice, i like your articles a lot and will be excited to read more