How to Invest Money in Stocks for Beginners India



You started a trading account for yourself. You decided that you will begin to invest in shares. But as a beginner, the very common thing that you will ask yourself will be how to invest money in stocks?

See, we can read our beginners so well that we already have the answer to that question ready! Be with us as we discuss some very key points on how to invest money in stocks for beginners in India.

1. What is my goal?

The most known yet forgotten question. What is my goal? Why do I want to invest? Do I want long term investment or short-term investment? When do I need the money that I am planning to invest? There are so many questions that one needs to think of while planning your goal. Planning can be hard and a boring task. But without planning or setting up a goal, where would you reach?

So, setting your goal is very crucial. You need to have a rough draft about what you need the money for and when you would need it. Also, as a beginner, keep track of how much to invest.

2. How much risk can I endure?

Risk comes as a complimentary gift when you start to invest in the share market. You can’t simply invest expecting no risk factor. Risk is a very unpredictable part here. You will have to decide how much risk you are willing to take? Can you handle the loss if you risk your money? Every decision that you take will contribute to the overall benefit/loss you make here.

By comparing various shares, their yearly statements, market environment, you decide. So, before investing you will need to calculate the amount of risk involved.

3. Will I be able to withstand losses?

Welcome to the market where nothing is permanent. One day you will be in profit and the next moment, due to some unexpected reasons, you make a huge loss. The air of the market keeps changing. You cannot expect only profits. You will be at a loss too. So, during such harsh times, will you be able to get a hold of yourself? Think about that as a beginner. You can definitely make wise and planned movements but be sure that losses won’t dishearten you. Bull or bear, you will have to bear!

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4. How many shares? Which all shares?

As a beginner, you may feel like you are in a forest of stocks. So many huge companies, so many emerging ones, which to choose? And most specifically, how much to buy?

These questions are very normal. But be very alert when you choose a company to invest in. If possible do a small research and then invest.

And don’t be in too much of a hurry with the amount of investment. Be sure about the investment before you jump on it.

Also, start with small numbers of shares. Don’t overdo it. Keep a proper check over the amount you invest in each share.

5. No loans/Borrowed money, please!

Sometimes, investing in the market can be addictive. To all the newbies, when you start earning more, you will think of investing more too. And for that many seek loans and borrowed money as the solution. But before doing that refer to the 2nd point we mentioned earlier- RISK.

Investing your money is very different from investing borrowed/loan money. So keep that thing in mind before doing anything so risky.

If your invested share prices are going up then well and good. But if the prices go down then- we believe you can do such small math on your own!

6. Don’t make your money rot

People make this mistake very often. You don’t know when to leave the party! A share that yielded you profit can also push you to lose. Don’t think that once you get a profit and that it will continue for eternity.

Knowing when to sell and book profit is as important as making a profit. Also, knowing when to exit keeping strict stop loss is important. You can always buy shares again if the prices fluctuate. As a beginner, hope can get infectious. Don’t let hope fool you that if you wait and wait, the prices will rise.

Keep your emotions at bay and don’t let your money rot!

7. Will I get a lot of money by investing in shares?

Yes and no! If you are lucky, you may invest in the right shares and earn a lot. But if things don’t work well, you will lose what you invested. This is a pendulum we are talking about. So, you can’t always expect huge returns. It is dependent on many factors like the shares you invest in, the atmosphere of the market and many more.

So you might make a lot of money but the uncertainty of the loss will also be there with that. Do not enter here if you only think of profit. There will be bad days where you will be losing. As a beginner, be ready to face everything on your way. Learn, explore and grow.

8. Diverse investing strategy

Invest in diverse companies. Do not put your entire money in the shares of one particular company. You should diversify your investments. You can divide the amount you plan to invest and choose different shares to buy. This will help you in the long run.

For example, there are 5 companies where you have invested, and two of them outperformed while one was neutral and the other two went to loss. Here, you will be able to handle your money. The profit and loss will be manageable. But imagine you have invested entirely in one firm and it went to lose. The money you lose will be huge here. Hence, diversification is always advised.

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Hope you understood our insights well. If you feel any other doubt regarding the same then let us know in the comment section so that we can help you out with it. Happy investing traders!

There are many online stock trading courses for beginners, do try that.

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