How can one start investing in stocks in India?
ew investors taking their first steps towards learning the basics of stock trading should have access to multiple sources of quality education. Just like riding a bike, trial and error coupled with the ability to keep pressing forth will eventually lead to success.
One great advantage of Stock trading lies in the fact that the game itself lasts a lifetime. Investors have years to develop and hone their skills. Strategies used twenty years ago are still utilized today. The game is always in full force.
So for new investors wanting to take their first steps,
1. Open a stock broker account
Find a good stock broker and open an account. Become familiarized with the layout and to take advantage of the free trading tools and research offered to clients only. Some brokers offer virtual trading which is beneficial because you can trade with play money (see #9 below).
2. Read books
Books provide a wealth of information and are inexpensive compared to the costs of classes, seminars, and educational DVDs sold across the web.
4. Find a mentor
A mentor could be a family member, a friend, a past or current professor, co-worker, or any individual that has a fundamental understanding of the stock market. A good mentor is willing to answer questions, provide help, recommend useful resources, and keep spirits up when the market gets tough. All successful investors of the past and present have had mentors during their early days.
5. Study the greats
Learning about the greatest investors of years past will provide perspective, inspiration, and appreciation for the game which is the stock market. Greats includeWarren Buffett,Jesse Livermore, George Soros, Benjamin Graham,Peter Lynch, John Templeton and Paul Tudor Jones, among others. One of my favorite book series is the Market Wizards by Jack Schwager.
6. Read and follow the market
News sites such as Yahoo Finance and Google Finance serve as a great resource for new investors. For in depth coverage, look no further than the Money Control. By monitoring the markets each day and reading headline stories investors can expose themselves to trends, 3rd party analysis, not to mention economic concepts and general business. Pulling quotes and observing fundamental data can also serve as another good source of exposure.
TV is another way to monitor the market each day with CNBC being the most popular channel. Even turning on CNBC for 15 minutes a day will broaden an investor’s knowledge base. Don’t let the lingo or the style of news be a nuisance, just simply watch and allow the commentators, interviews, and discussions to soak in. Beware though, over time you may find that a lot of the investing shows on TV are more of a distraction and are overall full of junk recommendations. This is a natural evolution; you are not alone!
7. Consider paid subscriptions
Paying for research and analysis can be both educational and useful. Some investors may find watching or observing market professionals to be more beneficial than trying to apply newly learned lessons themselves. There are a slew of paid subscription sites available across the web, the key is in finding the right ones for you.
IMPORTANT — Be careful. Many paid subscriptions come from independent traders and services that claim to have fantastic returns and can “teach” you how to be successful. 99% of them are a scam and come with higher prices of Rs 10000 per month or more.
8. Go to seminars, take classes
Seminars can provide valuable insight into the overall market and specific investment types. Most seminars will focus on one specific aspect of the market and how the speaker has found success utilizing their own strategies over the years. Not all seminars have be paid for either. Some seminars are provided free which can be a beneficial experience, just be conscious of the sales pitch that will almost always come at the end.
IMPORTANT — Like paid subscriptions, be careful with classes and courses. Most are easily over $1,000 and are sold with false promises to acquiring valuable knowledge. Their fantastic sales funnels will suck you in, take your money, excite you during the course, then leave you with a strategy that wasn’t even profitable to begin with.
9. Buy your first stock or practice trading through a simulator
With your online broker account setup, the best way to get started it to simply take the plunge and make your first trade. Don’t be afraid to start small, even 1, 10, or 20 shares will serve its purpose of getting you in the game.
If trading with real capital is not possible initially, consider using a stock simulator for virtual trading.
One of the most common mistakes traders make is to go all-in and try to score big with a full portfolio position out of the gate. This is an often painful mistake and why many new investors suffer big losses early on. Proper portfolio allocation is extremely important.
For some other simple tips checkout 55 Stock Tips For Investment Success by The Profit Sharing on I’M Possible
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