A Beginner's Guide to Investing

Once we start earning and making enough money to take care of our monthly expenses, we start thinking of ways to save some money and invest some. It is important to invest in equity for your future to build wealth and fulfill long term goals. Investing (especially long term) reaps benefits for you while you are busy in your life. A volatile market scenario, like the one we’re currently experiencing, is also a great opportunity with a lot of stocks up for sale.

But all said and done, how and where do you start from?

  1. Decide the way you want to invest
    There are several options to invest in the market. You have to decide how involved you’d like to be in selecting the stocks you want to invest in.
    1. You’re the kind of person who is interested in choosing the stock yourself, (and you have time to do the required research before investing). You need a Demat account and there are aplenty to choose from
    2. You don’t have the time or knowledge to do trading but understand the importance and value of investments. You need a brokerage firm that can understand your investment goals and offers investment management at a low-cost.
Some of the best companies that offer great services for both the type of investors are Zerodha, Motilal Oswal, Upstox, Sherkhan, ICICI Direct, HDFC Securities, etc

  1. Set a budget for your stock investment
    1. How much money is needed to start investing
      This depends on the kind of stocks you want to buy. If you’re the person who does everything themself then it depends on the kind of stocks you want to buy. If you’re the one taking advice from a brokerage firm, then based on your goals they will advise you the money you will need to invest in your portfolio
    2. How much money should you invest?
      This depends on how much you earn and the amount that you have left after you have made all the expenses and the required savings. Never put all your money in the market, save some for emergencies as well
Here are some quick Do’s and Don’t to invest in the stock market in India

     Always ensure that the market intermediaries that you are dealing with are registered with SEBI/ Stock exchange
     Do your research before investing
     Start with clear goals in your mind
     Be clear about the level of risk you want to take
     Invest consistently rather than putting a large corpus in one stock

     Never sign or carry forward an agreement with any intermediary without understanding the terms and conditions
     Never deal or invest your money based on rumors or tips that ensure guaranteed returns
     Never put all your eggs in one basket. Diversification is important, so spread your investment across sectors
Never ignore trading costs. It’s not just the brokerage costs, but also Demat account AMC, statutory costs, exchange charges, etc

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