Share market or stock market investment is not a favored investment alternative for majority of Indians but the fact is stock market is not a gamble as it is perceived by people and if you invest rightly then it can give good returns over a period of time. Now the question is how to invest in share market, well to answer that question let’s break it into a step by step process so that you can understand it better.
- First step – First you need to know your investment goals, so for example if your investment goal is of short term like buying a car within a year than do not invest in stock market for achieving that goal but if your investment goal is of long term like arranging money for buying a house after 5 years than you should definitely invest in stocks.
- Second step – Once you have decided to come into stock market next step is to open an online trading account so that you yourself can invest into stocks which you like rather than depending on stock brokers.
- Third step – Next you need to have clear cut plan about the money which you would be putting in stock market for next few years because majority of people put small amount in the beginning but as they start making profits they tend to put more money by breaking their fixed deposits and some even take loans at high interest rates and put it into stock market. One thing you need to remember is that stock market is all about financial discipline and the moment you deviate from that path you will be making losses in stock market. Therefore best option is you decide beforehand that you would be putting 50000 or 1 Lakh rupees in first year and then gradually as your income rises you be increasing your investment limit.
- Fourth step – Next you should not straight away invest into stock market you have to first learn some basics about stock selection and also start reading business magazines and newspapers for at least 2 months so that you get a basic idea about the working of stock market and then start investing gradually into stocks which you like on the basis of your knowledge about the economy of your country.
- Fifth step – Once you have made an investment than be patient, because if you are thinking your money will be doubled in next month than you are wrong as every investment needs time to give returns. Another point is you should not be greedy also so for example if you are getting 20 to 30 percent return in a year which is more than fixed deposits than you should take that profits and wait patiently for another opportunity because share market keep giving those opportunities.
I hope above steps will help you in learning about making investment into stock market and also making money in the long term on your investment.