Everyone seems to be so excited about investing in stock markets these days. There are so many myths and misunderstandings that make us all bad investors. Today I would love to share few of my beliefs which could again be a misunderstanding with you guys.
Why people invest in Stock Markets?
In India, most of the youth find onething fascinating about stock markets and that is quick bucks. They believe that this is short cut to wealth. Guys there is no short cut to wealth. A person is wealthy only because of his hard-work and patience. Otherwise it could be inherited fortune from parents. Anyways lets discuss on the two starting points in Stock Investment. Hard Work and Patience.
What kind of Hard Work and Patience you need to do?
Let me make one point clear. Never ask your stock broker which stock to buy and when to sell. Just because he is not here to make you rich but to make profit for his company. He will always entertain buying and selling. Remember your transactions is what makes them tick and not your buy n hold strategy.
The best person to pick a stock for you is YOU! I can understand it is hard to pick a stock if you are not following markets. Best thing to get started is follow markets and analyse the trend and situations that arise. Read everyother article you could find eventhough it makes less sense to you. Get help from your close friends who are already into it. Most of them won't share the losses they have made and only share the profit. So look for their mistakes and learn from it before you make your own. We are sure to make mistakes in stocks picking and time to sell etc. That is how we learn.
We all tend to think that our first stock pick should fetch us profits and then we can infer whether this thing suits me. Guys how many of you have started walking one fine day without ever falling down? Anyways I still fall sometimes...so that is part of life. Have u ever thought...I fell down...now I won't stand forever...let me sit here itself? If we think like that will we ever move in life? To get going...to keep moving we need to stand up again...same like that never ever get afraid of your failures in life and in Stock markets...To start with play with less money that you can afford to lose. Just to get the feel of it.
Look for fundamentally strong companies. Read and analyse whether the companies way of management is something you would enjoy? How they are treating their investors? What is their long term plans?, before looking into technical charts and other tech stuff...Then look for its market cap, how it performs compared to its peers in the sector based on sales turnover and profits. It won't be tough to find atleast one stock in the whole of NSE and BSE scrips listed by anyone. Let it be right or wrong. Learn to take risks and go for it. Remember always invest the amount you can afford to lose. Another thing that we all must think of is the money we put in is not to be withdrawn immediately. Give time for your pick to perform. Sometimes even I tend to sell it off seeing that it has reached some level that I expected. These are trading and don't confuse it for investment. Have a long term target. Atleast for few years. Don't fall for trading calls. For e.g, In CNBC or someother channel, few technical analysts will come and tell you...guys this scip is gonna go below this level..I would say SELL!...these are for traders. You don't need to worry what will happen to that scrip today or tomorrow. Think of it as a long term bets. Don't panic. We can see people hyping the budget and other such economic factors...its true the markets tend to crash or sail based on it...but how long? its just temporary...markets has to come back and in few years time it will always be back...
Have your targets with the money you have invested and also keep tracking the stock in a weekly or monthly wise...and not daily...daily tracking increases panic and force you to sell...Read about it always..what are companies plans? Are they really crashing? In case you realize that they are really crashing and has no reforms planned yet...you know your money is in trouble...that is one thing that can force you to sell before your intended years.
As great investors in Stock Markets told us, "Buy when everyone is selling and Sell when everyone is buying"...But for me I would say buy your pick when everyone is selling...sell when it is time for you to sell it...if you tend to sell when everyone is buying it could be another trader in making and not an investor...An investor should always look for oppourtunities..whether it is stock markets or wherever. In stock markets, your oppourtunity is when the scrip you are tracking has hit a certain low which could make you buy. Always look for long term bets...there is no gain without pain. Patience wins in markets.
You must have read about STOCK MARKETS CRASHES in Indian newspapers...People read about it and acts insane you know. I know many guys who sold of everything at tht stage thinking it is crashing and will never come back...The wise ones knew it was wealth in disguise...you would be amazed to know that in last year 2008 October...stocks that traded in X levels are now 3X - 4X levels...take most of your picks and compare the price in last year october or February and see the price now...this is not to convince anyone..this is just to make you realize the facts...its all there..you just needs to put some time to learn...
Its fun to compare it with some sales going on...for e.g. In Big Bazaar, if they tell you..you can buy two Colgate pastes for the price of one and coincidentaly you are in big bazaar for your monthly shopping...you would definitely buy that...why? Because you think this is profit! but how often you need to buy toothpaste at home? still you would argue...its a good deal and I will use when we need...Same applies to stock your oppourtunity is when a stock price comes low and market crashes...that is the 1 for 1 sales that happens in Stock market...People in our country think that its crashing so should stay away..but why they don't think 1 for 1 paste...I should stay away..that is greed...No investor invests without greed...so if you are greedy enough these are times you need to exploit.
Remember that the picks you make can go wrong also...never lose the trust in yourself and learn from your mistakes...
To invest in stock markets...you need to have a demat and trading account.
There are lot of companies offering this.
1. Religare
2. ICICI
3. Kotak
4. Geojith
5. Anand Rathi
6. HDFC
7. Sharekhan and many many more...
Check out with them and choose the one you think is much profitable to you.
Look for their rates...every trade you do...they have a commission...look for those rates and yearly maintenance rates...
Next Blog on ... my stock picks in different industries/sectors
Why people invest in Stock Markets?
In India, most of the youth find onething fascinating about stock markets and that is quick bucks. They believe that this is short cut to wealth. Guys there is no short cut to wealth. A person is wealthy only because of his hard-work and patience. Otherwise it could be inherited fortune from parents. Anyways lets discuss on the two starting points in Stock Investment. Hard Work and Patience.
What kind of Hard Work and Patience you need to do?
Let me make one point clear. Never ask your stock broker which stock to buy and when to sell. Just because he is not here to make you rich but to make profit for his company. He will always entertain buying and selling. Remember your transactions is what makes them tick and not your buy n hold strategy.
The best person to pick a stock for you is YOU! I can understand it is hard to pick a stock if you are not following markets. Best thing to get started is follow markets and analyse the trend and situations that arise. Read everyother article you could find eventhough it makes less sense to you. Get help from your close friends who are already into it. Most of them won't share the losses they have made and only share the profit. So look for their mistakes and learn from it before you make your own. We are sure to make mistakes in stocks picking and time to sell etc. That is how we learn.
We all tend to think that our first stock pick should fetch us profits and then we can infer whether this thing suits me. Guys how many of you have started walking one fine day without ever falling down? Anyways I still fall sometimes...so that is part of life. Have u ever thought...I fell down...now I won't stand forever...let me sit here itself? If we think like that will we ever move in life? To get going...to keep moving we need to stand up again...same like that never ever get afraid of your failures in life and in Stock markets...To start with play with less money that you can afford to lose. Just to get the feel of it.
Look for fundamentally strong companies. Read and analyse whether the companies way of management is something you would enjoy? How they are treating their investors? What is their long term plans?, before looking into technical charts and other tech stuff...Then look for its market cap, how it performs compared to its peers in the sector based on sales turnover and profits. It won't be tough to find atleast one stock in the whole of NSE and BSE scrips listed by anyone. Let it be right or wrong. Learn to take risks and go for it. Remember always invest the amount you can afford to lose. Another thing that we all must think of is the money we put in is not to be withdrawn immediately. Give time for your pick to perform. Sometimes even I tend to sell it off seeing that it has reached some level that I expected. These are trading and don't confuse it for investment. Have a long term target. Atleast for few years. Don't fall for trading calls. For e.g, In CNBC or someother channel, few technical analysts will come and tell you...guys this scip is gonna go below this level..I would say SELL!...these are for traders. You don't need to worry what will happen to that scrip today or tomorrow. Think of it as a long term bets. Don't panic. We can see people hyping the budget and other such economic factors...its true the markets tend to crash or sail based on it...but how long? its just temporary...markets has to come back and in few years time it will always be back...
Have your targets with the money you have invested and also keep tracking the stock in a weekly or monthly wise...and not daily...daily tracking increases panic and force you to sell...Read about it always..what are companies plans? Are they really crashing? In case you realize that they are really crashing and has no reforms planned yet...you know your money is in trouble...that is one thing that can force you to sell before your intended years.
As great investors in Stock Markets told us, "Buy when everyone is selling and Sell when everyone is buying"...But for me I would say buy your pick when everyone is selling...sell when it is time for you to sell it...if you tend to sell when everyone is buying it could be another trader in making and not an investor...An investor should always look for oppourtunities..whether it is stock markets or wherever. In stock markets, your oppourtunity is when the scrip you are tracking has hit a certain low which could make you buy. Always look for long term bets...there is no gain without pain. Patience wins in markets.
You must have read about STOCK MARKETS CRASHES in Indian newspapers...People read about it and acts insane you know. I know many guys who sold of everything at tht stage thinking it is crashing and will never come back...The wise ones knew it was wealth in disguise...you would be amazed to know that in last year 2008 October...stocks that traded in X levels are now 3X - 4X levels...take most of your picks and compare the price in last year october or February and see the price now...this is not to convince anyone..this is just to make you realize the facts...its all there..you just needs to put some time to learn...
Its fun to compare it with some sales going on...for e.g. In Big Bazaar, if they tell you..you can buy two Colgate pastes for the price of one and coincidentaly you are in big bazaar for your monthly shopping...you would definitely buy that...why? Because you think this is profit! but how often you need to buy toothpaste at home? still you would argue...its a good deal and I will use when we need...Same applies to stock your oppourtunity is when a stock price comes low and market crashes...that is the 1 for 1 sales that happens in Stock market...People in our country think that its crashing so should stay away..but why they don't think 1 for 1 paste...I should stay away..that is greed...No investor invests without greed...so if you are greedy enough these are times you need to exploit.
Remember that the picks you make can go wrong also...never lose the trust in yourself and learn from your mistakes...
To invest in stock markets...you need to have a demat and trading account.
There are lot of companies offering this.
1. Religare
2. ICICI
3. Kotak
4. Geojith
5. Anand Rathi
6. HDFC
7. Sharekhan and many many more...
Check out with them and choose the one you think is much profitable to you.
Look for their rates...every trade you do...they have a commission...look for those rates and yearly maintenance rates...
Next Blog on ... my stock picks in different industries/sectors
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