1. Focus On The Goal
If you are considering buying some stocks just to remain in mainstream fashion, then you have landed for the wrong reason. Invest in the stock as the market per your financial goals. Fix the time frame for different investment goals. Your goals can be from a new house to shifting in another city and much more. A bigger time frame yields better returns. Once you are aware of goals, you can invest in a particular amount and time frame.
2. Assemble A Plan Or Strategy
Once you are aware of your goals, you can turn your attention and get a suitable strategy. There are numerous approaches, each with its pros and cons. Start understanding each strategy and affix with a tolerance of risk and time frame. Often we have heard a misconception that larger savings need a huge amount. This is not true in all cases, build an emergency fund, and start allocating a fixed amount each month and save. Even if you are savings proportion turns to be either 3000-5000, it’s fair enough to enter in a pool of share market.
3. Gain Knowledge
Before entering into the investing market, understand the type of asset classes. Mixed classes or diversified assets give you a balanced investment that can be ups and downs. There are various resources like books, apps where you can read and enhance your skills for stock marketing.
4. Choose Your Broker
There are two types of broker lies in this category – Full-service broker and discount broker.
Full Service Broker – They are a traditional broker who covers everything from trading, research, and advice for stocks and commodities. They charge a commission on every trade their client performs. These brokers give you service of Bonds, Insurance, Forex, Mutual Funds, FDs, and much more. Some brokers are ICICIDirect, Kotak Security, Sharekhan, etc.
Discounted Broker – These brokers offer you a trading facility only. They do not offer you advisory, though they can charge you low brokerage, high speed, and a reliable platform for trading stocks, currencies, and currency. We do not recommend them for beginners.
5. Keep An Eye And Dip Deeper
Start observing companies around you and dig deeper to find its parent company. Start researching about products or services that we use in daily life. From a small company to a huge one, there is a company behind everyone. Track their sales, performance, profits, etc to invest in the future. Invest in large-cap companies at the initial stage, once you are aware of strategies and market risks, you could lead ahead in mid and small caps.
6. Keep A Record Of Your Performance
Keep a record in the book, excel sheet, or google spreadsheet of your records. Jot down the records you need to study, the stocks you have already shortlisted, and miscellaneous stock. This would give you a better idea of investing in the future and following them.
7. Determined Exit Plan
There are two ways to exit stocks, getting profit, or cutting a loss. Usually, you should sell a stock when you are in a situation
- You badly need cash in hand
- Stocks basic have changed
- Found a better opportunity to invest
- Reached to your goals. You should have always an exit plan before entering a stock market.
There is no sure-shot formula for learning, every time you learn something different in the stock market. Don’t limit your learning and knowledge, keep observing, get advice to improve your strategies for investment in the stock market.