Understanding the basics of stock investing is very vital. In this article you will get to know the best tips for investing in stock markets. The stock markets are known for their volatility. Some make millions, while some loose their hard earned money. Earlier we had posted an article on the Typical Journey of a Beginner Stock Trader because awareness is the first step towards development and we hope you learned a lot from it. While investing in stocks, one needs to be well-informed. Very little can be done after you have invested. Let us look at certain factors which every investor (specially beginners) should keep in mind before they begin trading.
Best Tips for Investing in Stock Markets
Don’t blindly follow advice from media
Various newspapers (like Economic Times, Mint, Business Standard etc.) and business channels (like ET Now, CNBC etc.) give recommendations on various stocks. While they can be helpful, most of the market has already considered this public information into consideration . There won’t be any first mover advantage while investing in such stocks.
Get sorted with your funds
Another thing to be aware of while investing in stocks, is the source of funds. Avoid investing or trading by taking debt. Try to develop a habit of saving some amount each month and invest it on a monthly basis like an SIP
Understand basics of stock investing
Many investors depict typical traits of herd mentality. They follow whatever a particular set of investors are investing in and suffer losses. They do not know how to analyse stocks. Understanding basics of stock analyses ,does have its benefits.
Keep loss limits in mind
When the going gets tough, the losses keep mounting. To keep a cap on the losses, always invest with a stop loss. The stop loss, will prevent losses from multiplying.
Find a good broker
One of the most important things to consider while entering the capital markets is to consider the type of broker. There are service providers like HDFC securities, ICICI direct, Kotak Securities etc. which provide you with 3 in 1 accounts. They also provide their recommendations, though their brokerage is on the higher side. If you want to save on brokerage, firms like Zerodha and Tradejini provide discount services. To quickly open an account with Zerodha fill the form here – Zerodha
Begin with small investments
Initially, begin with small amounts of Rs 1000 or Rs 2000. Start earning returns on them. Understand where you made mistakes. Once you begin getting consistent results and start beating the market, you can increase the ticket size of your investments.
The above mentioned best tips for investing in stock markets might not seem to make sense initially, but once you enter the game, it makes a huge difference. It helps improve your psychology while trading. Keep in mind these basics of stock investing to make the most of the growth of capital markets. What am I missing here? If you have something to share let me know about it in the comments and I’ll add it in!
All the best! 🙂