How To Invest In Stocks – The Beginner’s Guide To The Stock Market
- January 23, 2021
- Posted by: Administrator
- Category: Blog
“Someone’s sitting in the shade today because someone planted a tree a long time ago”
- Warren Buffet
If you educate yourself and know where to invest, then the stock market is nothing to be afraid of. It can be easy to make a great return over the long run. Stock Market does have risks but you will most certainly know people who’ve become incredibly rich by doing it.
Indians believe that the stock market is a gamble and so they put their money in a savings account or fixed deposits considering it a safe investment. But what most of us fail to understand is that banks give 5-8% return on such investments and our inflation rate is around 5% so such investments don’t get the job done.
Here’s how to invest in the stock market:
- Choosing a stock investment platform:
Before deciding which stocks to purchase, you should first figure out the best way of purchasing them. You have three main options:
- Online brokers
- Traditional investment advisors
- Robo advisors
Choose the one that best suits your personal investing needs.
2. Make stocks your primary investment:
You don’t have to put all your money into stocks, but it’s clear that stocks should be the primary investment in your portfolio.
- The best stocks to invest in:
Many financial advice sources focus on specific individual stocks. But for a new investor, the best strategy is to look at the bigger picture and focus mostly on stock categories. The best approach is to hold some stocks in each of the following categories:
- Value Stocks
- High Dividend Stocks
- Growth Stocks
- Investing in stocks for beginners:
Never invest in anything you don’t understand, particularly individual stocks. When you buy stocks, you’re investing in a business. You need to know as much about that business as possible, including the industry it operates in.
Before you begin investing in stocks, you first need to create a stable financial foundation. That has three parts:
- A stable income source.
- An emergency fund. (three to six month’s living expenses in the account)
- Have a habit of being a regular saver.
- Different types of stock investments:
There are three primary ways to hold stocks:
- Individual Stock
- Mutual Funds
- Exchange Traded Funds (ETFs)
- Unique tips for new stock investors:
Here are some specific tips that are important for new stock investors to know:
- Start with managed investment options like Mutual Funds or ETFs
- Diversify your portfolio
- Have a good ratio of Debt and Equity
- Never make investments on borrowed money
(Vishvam is a semester IV student – class of 2022 – hustling his way between studies and freelancing marketing work during the day and exploring new arenas at night also has a sense of finance.)