Before you jump into how to invest in stock market India you need to answer yourself the three W’s Why? What? When? Why do you really want to invest in stocks? What is that you want to invest in for? When is the right time to invest in stocks? But before you get in remember that Stock market is not the place if you want to get rich quick nor it is a place to gamble your money. No one can always be right and earn be prepared to loose some money before you start trading and never enter into share market trading if your nervous and cant see your hard earned money evaporate.
Why to invest in stock market?
Share market might have its own ups and down but stock market investments are worthy if you want to keep pace with inflation, they help you reach your financial goals better if you choose the right mix for your investment within the various sectors available. Investing in stock market is always a good way to keep your money work for you and here you don’t to put a lot of money, a few thousands can do wonders for you if you do proper stock analysis and choose penny stocks wisely. There are cases where investing for stock market long enough made a fortune for many people. Applying proper technical knowledge can definitely make a decent income, Its always good to invest a portion of your money in blue chip shares apart from your savings accounts but keep in mind only invest what you can afford to lose.
What is that you want to invest in for ?
There is absolutely no need to rush in and invest in the global share market be it penny stocks, small cap stocks, mid cap stocks or blue chips. Learn share market basics, set proper goals, be realistic, stick to them and learn to make proper use of the share market information you have and always observe the world stock market in live. If your only aim is to make your money grow, then it is not necessary to buy a super growing stock like Microsoft to get a respectable return buying any of the nifty 50 index stock’s will fetch you good returns over time. market is rapidly growing and although there are fluctuations it has been rewarding since many years. So, early withdrawal is not enough rewarding and you would most likely end up paying a penalty that will erode and make a dent to your wealth growth.
When is the right time to invest in stocks?
It is not always the right time to invest in stocks. Share market trading plays by the rules of greed and fear. Buy shares when everyone is in selling mood and sell them when everyone else are busy buying. You can usually earn high returns better than savings account interest rate. Never try to buy a hot running stock at high price or never buy anything on event days like election days or on budget days. Also no sure shot success formula has been found in stock market so don’t be a sheep and run along with the herd.
“you should never try to time the market. In fact, nobody has ever done this successfully and consistently over multiple business or stock market cycles. Catching the tops and bottoms is a myth. It is so till today and will remain so in the future. In fact, in doing so, more people have lost far more money than people who have made money”says Anil Chopra, group CEO and director, Bajaj Capital.
Have realistic approach, never let your emotions dominate your judgement, respect the stock loss and step back when you made a wrong trade no one can always be correct. Capital protection is important, you can only earn good if you can cut short your losses and don’t allow your losses to consume your profit. It may take many trade to earn handsome amount of money but, one bad trade can wipe it all off. Many a times investors burn their hands by playing emotional game instead to sticking to basics and monitoring properly. If you can monitor time to time and don’t dare to accept your losses then stock market isn’t the place for you….Try investing your hard earned money somewhere else.