How to invest in stock market as beginner might be the question which pops in your mind when you hear-“stock market”. There is a possibility you might have read many articles investing in the stock market as a beginner. You might think you know it all but you need to fail numerous times before making a profit. Many people think it is too risky to enter the stock market but it is not so. You can be the master of the game when you start taking a calculated risk. This article talks about simple yet effective process of how to invest in the stock market as beginner.
Basics of stock market investing
3 things you need to have before entering into the stock market
Four quick steps to follow while entering the stock market as a beginner
Do full proof research
- Before entering the stock market and investing your hard-earned money, you should understand the basics of the stock market. How does it work? What are the stock market indices? How is price of one particular stock goes up or down?
- Research is the key to success in the stock market. The more you research the more you gain knowledge. Then you will be able to analyze the stock and invest in the stock market.
- You can do research by studying the company’s balance sheet, prices of the stock for the last 3 years, the company’s future plans, market share, etc.
- You can also watch our YouTube videos for daily stock market tips and advice.
Set Financial Goals
- Assess your financial situation and set one particular amount which you are ready to invest monthly, quarterly or yearly.
- You cannot expect that you will start making money from 1st day but you will get better with practice.
- Follow 50-20-30 rule i.e. 50 percent of your income should go towards living expenses, i.e., household expenses, including groceries; 20 percent towards savings for your short, medium, long-term goals; and 30 percent towards spending, including outing, food, and travel.
Know your risk potential
- Every person has his/her risk-taking capability according to the financial situation. While assessing the financial situations, you will get the knowledge of risk-taking capability.
- As a beginner, you can go for SIP, mutual fund or IPO option after studying the company profile.
- After knowing your risk-taking capability, set an amount for which you can take risks and select the stocks.
Start Investing and learn from form the mistakes
- Select stock you want to invest according to your research and analysis. You can also hire a broker or fund manager to get a better idea for which you might get charged.
- Analyze the returns of the stocks invested and check which other stocks are performing better and could be invested in.
- Learn from your mistakes and keep improving.
The mantra to success in the stock market is- “Research”. Keep studying, start analyzing and keep investing.
Frequently Asked Questions
Do you feel still some of your questions are unanswered, we will try to answer some of the frequently asked questions
What is the right time to invest in stock market?
Today is the right time to invest. There is no right or wrong time to invest in the stock market. It depends on which stock you are planning to buy and your research about the stock market.
How can I buy shares in India for beginners?
You can buy shares by opening a Demat account which helps you to buy securities in electronic form.
Is stock trading a good career in India?
Yes, stock trading is a good career option as long as you are willing to learn and unlearn as stock market changes. If you have decent financial knowledge and want to make money, then you can view stock trading as an attractive option. You have to create your strong customer base then only you will start earning.
How long should I hold a stock?
It depends on whether you are interested in intraday trading or long term trading. There is no perfect formula for this. It depends on your analysis of how a stock is going to perform in future and financial requirements.
