Once You have basic knowledge of the Stock Market and some money for investment, you can begin investing. But question How to enter in the Stock Market.
Through appreciated examples, you learn how it is safer to invest in multiple companies. If you are cautious with your investments, study trends, and understand the company whose stocks you are buying, you can assure returns of between 15 to 20%.
After understanding the terms associated with the stock market and understanding its intricacies, It is now time to apply that knowledge practically. How does one take the right first step in the market?
When to Start in the Stock Market?
There is no good or bad time. Start when you have:
- Basic Knowledge of the Stock Market
- Money for Investment
Apart from this, You have to:
- Be ready for Profit or Loss
How to enter in the Stock Market?
Invest in multiple companies. Do not invest in just one company but choose at least 7 to 8 companies so that you have a diverse portfolio. This is to offset losses you may make in some shares.
Rahul is an investor who studies a company thoroughly before investing. He also reviews his portfolio regularly. He has invested money in the shares of seven companies.
Then, there is Rakesh, who has an eager investor but does not study the companies he invests in. He has invested in the shares of two companies. The losses, If any that he will suffer will be really heavy.
Rahul suffered losses in three companies but this was balanced as the other companies made profits. Among the two, Rahul is the Smart investor.
How much money can you make from the stock market?
There are investors who make losses in just the first two days and others who make so much money that they are nonplussed. Why does this happen?
Let us see the returns if, for instance, your father or grandfather had invested Rs. 10,000 in Wipro some 40 years ago. Today, that amount would be Rs. 700 crores.
But don’t forget that back then, Rs. 10000 was a huge sum of money. Had you invested just Rs. 1000 then, even that would have been worth Rs. 70 crores. Had you even invested just Rs. 100 then, even that would have been Rs. 7 crores today.
But the share market can make a billionaire into a pauper overnight if your money is not invested wisely. You could invest Rs. 700 crores, and overnight, it could be valued at Rs. 10000. You need to treat the markets very cautiously.
However, if your strategies, you can expect the following:
- 15 to 18% Returns
- Investment for a minimum of 5 years
- 2.5 times extra than FD rates
- 2 times extra than Real Estate or Gold
How much should I invest in the beginning?
Since investing in the stock market is an attractive proposition as returns are good, how much should one start with?
Whether you are a student, housewife, or a small businessman, You can begin with an investment of just Rs. 1000 in the Stock Market. This is considered a good step.
Sohan is a school teacher and every month, he invests Rs. 2000 from his salary in the stock market. In the following years, after getting his increment, he increased this amount by 15%. So he now begins investing Rs. 1150 every month in the stock market.
Let’s assume that Sohan gets 15% returns on the stock market. If you stay invested for the long term, you can get up to a 20% return, but here we are taking a conservative estimate.
This means that after 25 years, Sohan will be a millionaire. But, to do this, he has had to invest every year in the stock market. By doing this, he would increase his portfolio every year as well as choose it with care.
Is a commerce background required?
Does this mean that one has to be a finance or commerce graduate or a CA to become an investor?
You don’t have to be one, and instead can be a:
Whatever you are, you can invest and get returns in the stock market.
Some years ago, in America, there was a survey in which children were to pick a share of their choice. There were also CAs, who had loads of experience and were also asked to choose shares.
In a survey after 10 years, it was found that:
The children’s pick shares gave good returns and The CAs shares, despite their experience and study of company balance sheets, did not yield good returns.
Why did this happen? Because the children chose those shares from companies whose products they were using. These companies included Cadburys, Disney, and Barbie. They were both consumers and customers of the products of these companies.
When a company is able to satisfy its consumers, it always does well. The CAs did not see the ground reality, but children focussed on the products of the companies.
Your plan should be to:
- Make preparation to enter the market.
- Choose 5 stocks that have given 10% returns in the last year.
- Get information about Stock Companies.
Write all this information in a diary and study it.
Update your knowledge and then invest in the stock market. Invest in multiple companies to have a balanced portfolio. Strategies and get 18 to 20% returns on your investment. I hope you get all the questions in When and How to enter in the Stock Market? Article…