How to start Investing in the Stock Market?

One of the best things you can do in this life is invest; it can be in your health, relationships, education, businesses, or most favourite of all, "the stock market." Many people think of investing in the stock market, but very few actually do so. This is because people either don't have the proper knowledge and guidance on how to invest or they have the fear that they will lose all their money in the market.

But those who invest create wealth, and this wealth can only be created by taking calculated risk. Without taking any risk, you can't grow your money in the stock market, and neither can you grow in your life.

So have the courage to take the risk that will create your wealth because I am going to share some important things with you that will help you take good decisions while investing by keeping your risk low.

 So here are 6 important things to kick-start your investing journey:

1. Understand the market

The market is a very volatile place. Every moment, something is going on in the market. Good news, bad news, company results, global scenarios, inflation rates, various policies, and many more go into the market on a daily basis. Thus, market is always filled with opportunities, we just need to grab them and make money. With that said, the market is also very uncertain and can change its mood at anytime. Market follow it's own cycles, a upside rally continued with a downside phase which then again turns into a upside rally and so on. So, market always go through upside and downside phases, but eventually the market has to go up because the world economy will continue to grow with time, which will lead to more investment in the stock market.

But, for an investor, these market cycles do not matter. An investor has a long-term vision for any company and knows why he or she has invested in a particular company and what the reasons are. A downside phase in the market is always a golden opportunity for any investor to accumulate more shares of any company at a discounted price.

So, when you invest, don't be fearful or panic due to downside phases; see them as a good opportunity to accumulate more shares to create more wealth. Market phases will always be there, but your vision should be focused and strong enough to hold your investment in any situation.

 

2. Decide the amount to invest.

Now, there are two things you have to decide: whether you want to invest a good amount in a few stocks that you think will perform excellently in the long run or invest a little every month or year. If you choose to invest a defined amount in a few stocks, then you should research those stocks very thoroughly before investing in them and have faith in your research. Here, I will suggest that you always keep some money in cash to accumulate more when the market is in a downside phase. For this, you can invest half of the defined amount and save the other half to accumulate later if the market gives us an opportunity to buy stocks at a discounted price.

Now, if you want to invest a little fixed amount every month or year, then you should start doing a SIP (systematic investment plan) in index funds or mutual funds. If you want to invest directly in stocks, then you can keep accumulating your favourite stocks every month Or, there are ETFs (exchange-traded funds) of indexes, which are present in the form of stocks in which you can invest. Even in the downside phase of the market, you can continue accumulating them and create your wealth through compounding.

 

3. Decide short-term or long-term

This decision is completely a choice of the individual whether to invest for short term or long term. Both can create wealth, but it depends on the investor's goal and vision towards his or her investment. If you research and like a company's fundamentals and you think that the company will perform incredible in the coming future, then your vision should be long-term, and you should believe in your research and in the company as well. If you want to invest for a short period of time, then you should give more preference to the technical analysis (chart of the stock) and also see the fundamentals as well, which will give you more confidence in buying. Long-term and short-term, both will make you money, but your research should be strong enough and you should believe in it; the rest of the market will take care of your ROI.

 

4. Choose the stocks you want to invest in

To choose the best quality stocks, there is one simple trick you can use: look around yourself and see what products you use on a daily basis and what other people around you use for their needs. The most common things you will see are the most popular products on the market. So the companies that eventually sell them are making a good profit and must be profitable companies. Your research doesn't end here; you just found the companies. Now, analyse those companies. Do their fundamental analysis and technical analysis both, and then decide if they are worth the investment. Other than this technique, you can see different sectors and pick the top stocks from every sector that are performing really well and can perform even better in the future.

Note: Always invest after studying the fundamentals and technicals of the stock.

 

5. Track your investments

After you have invested your hard-earned money in the stock market, your work doesn't stop here. Whether you are a short-term or a long-term investor, you should always track your investments once in a while to see how they are performing and what the future plans of the companies you invested in are. Tracking your investments will always give you an idea of what changes you should make to your investment portfolio to get the desired results. So, keep investing, but also keep tracking.

 

6. Be patient with your investment

Now comes a very crucial part of investing, this is a completely related to psychology.  As we discussed in the very first point, the market follows cycles of upside and downside phases. Now in a downside phase of market, many newbie investors get very panic when they see their portfolio going down and in fear they exit their investment thinking that they will lose their money. Fear is an enemy of growth, and to grow, you have to face the fear and eliminate it from your life. Always remember that a bearish market is a golden opportunity for investors to accumulate more shares of the stock at a discounted price. Instead of selling your investment, find the opportunity to invest more. The market is like our life; it has ups and downs, but eventually, after hitting rock bottom, everything has to go up. After every downfall, the market will turn bullish and will start an uptrend, so believe in your investment, believe in yourself, have patience, and hold your investments tightly.

"To grow, you need to be fearless."

 

So, before you start investing in the stock market, keep all these things in mind and make your decisions wisely.

 

                   HAPPY INVESTING!!

 

 

 

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