Why Invest In Stock Market?
With the ongoing pandemic, all job sectors have been severely affected, and fresh graduates have trouble finding jobs easily. Those who are motivated to learn and be financially independent have an excellent option of investing in stock markets. It is the only sector that has been almost immune to the pandemic, and looking at the loss of momentum in the job sectors, this seems to be a great time to learn and earn.
As beginners, students have lower capital than average investors, and since they have their family to back them up, they can have a more risk-taking appetite. Even small investments of theirs can reap high returns, and this regular source of income can be financial support for both themselves and their families.
Most think of stock market investing as a sort of "gambling" but this sort of mentality arises due to the lack of knowledge or not being familiar with the correct techniques. Students can take up online courses on "how the stock market works" or "Smart Investing courses" which teach all the basics of stock markets right from IPO all the way to monitor Nifty-50 and Sensex.
Though we know that Stock Market Investment and compounding are great ways to make money, the greed to make more money should not compel us to put all our money into the stock market without giving it much thought. Strategic investment and patience are the keys to building wealth.
Now the question arises: How exactly to invest in Stock Market?
Let's discuss the points in Brief.
1) Invest only your Surplus/Additional funds:
This involves your pocket money or the money you go around partying, but the red flag is not to invest the money which is kept aside for your college fees or your hostel rent.
2) Keep some cash in hand:
Investing all your money is a poor judgment which we have already discussed, so this money acts as your emergency fund, which is reserved for critical problems.
3) Define your investment goals:
Define a target that you want to achieve so that you don't get swayed by your goal. This includes deciding a clear course of action, making a clear roadmap, and sticking to the plan.
4) Read some investment books:
Some great books that are recommended by me are "The intelligent investor" or "The little book that beats the market". Read the thought processes of great investors like Warren Buffet, and make your own customized route for intelligent investing.
5) Selecting a broker and a platform:
Select the type of broker you need, be it a full-service broker or discount broker. Keep in mind that even though discount brokers charge low brokerage, they don't offer advisory. For example, Zerodha charges very low brokerage but it is a sort of do-it-yourself broker.
6) Start researching on common stocks and invest:
Start looking at companies from a different perspective, and try to learn more about their growth, whether they are blue-chip and what their current rates are, if they are worth investing, what has been their track record, etc.
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