How to Start Investing in the Share Market for Beginners?

Hey there, future investors!  If you are thinking of investing in the share market, then this is a very good thing. Investing in the share market is not very difficult. When I stepped into the stock market for the first time, I felt that I had entered a new world. But when gradually I started studying and gaining experience in the share market, after gaining experience, I started finding it easy to invest in the share market. Don't worry my friend, I will tell you how to invest in the share market. I will guide you step by step. 

Understanding the basics

1. What is the stock market?

Stock market is a place where big companies collect money to further expand their company. For that, the company issues its own shares to the public, from where the public buys the company's shares and makes it their stake in the company and the company gets money in exchange for the share. In this way, after any company is listed in the share market, trading in the exchange starts. As the company does good work, its profit increases, in the same way, the price of the company also increases and people get profit. Sometimes the company issues dividends even when there is high profit, due to which the shareholder gets profit in the form of interest.

2. Why invest in the stock market?

Investing in the stock market, like investing in a stock or investing in a mutual fund or index fund, is a great way to grow your money over time. Although there are ups and downs in the stock market, but if seen in the long term, there is a high expectation of profit. Investing in mutual funds is like planting a tree, just as a seed is planted, it gradually grows and after growing, it gives us fruits. Similarly, investing in mutual funds by starting a Systematic Investment Plan (SIP) and later Generating monthly income from SWP which helps us financially. 

  Click here for a Demat Account Opening in Zerodha (Inveting and mutual fund free, F&O Per order Rs 20)

Getting started

1. Educate yourself

Before investing in the share market, you will have to learn about the share market, only then you can earn good profits from the share market. For example, if you want to become an engineer, then you have to study engineering for 4 years. If you want to become a doctor, you have to study for 5 to 6 years, only then you can become a successful engineer or doctor. Similarly, to earn profits from the share market, it is very important for you to have at least two to three years of experience in the share market along with education.

As before investing in the share market, I have given myself two to three years of time to learn and experience the share market. After that I earned good profits from the share market, today there are many learning platforms available. Like books from YouTube and the Invest Expert app and website” which provides you with free share market education. 

2. Set your goals

Before investing in the share market, determine your goal, for whom am I investing?

The goals can be of different types, such as I want to have financial freedom even before the job, for that I need a big amount. I want to build a nice house and buy a car. So in this way, your goal should be already determined. 

3. Manage your risk tolerance

You always have to manage your risk. For this, you should assess in advance, how much money you have in total. And how much money can you invest with that money? So that even if the market falls, you will not face any kind of problem, nor will the loss affect your health and wealth much. 

Choose your investment approach

1. Stock vs Index ETF Funds

To invest in the share market, you can always select the stock by doing fundamental and technical analysis, where the risk is slightly higher. If you want to take less risk, then you can also invest in index ETF funds, where your chances of profit are very high and the risk is much less.
 

2. Mutual funds like passive Income

Investing in mutual funds is a very low-risk investment where we do not need to manage our own money. For this, the fund manager manages, in which some part of the profit is given to the fund manager in the form of expense ratio. In mutual funds, we deposit small amounts every month as recurring deposits and when we have a large amount, we can withdraw the money at once or take advantage of the Systematic Withdrawal Plan (SWP) as a passive income. Where we get small amounts every month, with the help of which we can meet the regular expenses of our house.

Start Small and Diversify your portfolio

1. Begin with a small amount 

To invest in the share market, we should start with small amounts. Small amounts like 10000 or 25000 so that if any mistake happens in small amount, then we can learn from it and note down all the past mistakes so that such mistakes do not happen in the future. 

2. Diversify your investments

Whatever investment we are making in the share market and whatever amount of money we are investing in it, it should all be diversified. Diversification means that if we have invested ₹ 25000, then that money should be invested in at least 3 to 4 shares. So if one share falls, we will retain the money for the remaining two shares. If one or two shares do not increase much, but one share increases significantly, our average profit should still remain very good. By investing money in any one stock, there are high chances of losing our money. Therefore, it is important to diversify the portfolio. 

Open a Demat Account for investing

To invest in the share market, you must have a demat account.  With which you can buy and sell shares in the share market, for this you have to make the right choice.

I am telling you how to choose.

1. There should be the lowest brokerage.
2. There should be a learning platform to invest in the share market.
3. If any problem arises, there should be a support portal, where we can get solutions to our problems.
4. Both the broker's app and website should be user-friendly. 

ZERODHA has the lowest brokerage for trading and investing 

1. Share buy and sell brokerage is free (Delivery)
2. Demat Account opening fees 0
3. Learning platform YouTube Zerodha, Zerodha varsity, and Zerodha streak.
4. Support portal and calling facility available.
5. Kite by Zerodha app, Coin, and Zerodha website are available for Investing.

Click here for Demat Account Opening

Monitor and learn

1. Keep track of your investment

Whoever has invested in the share market, it is important to track all the investments, which share is going up? Which stock is going down? What causes going up and going down? What is the market sentiment? How is the global market? 

You need to see all these things. 

2. Learn from your experience

You need to see all these things. There are ups and downs in the share market, due to which whatever money we have invested is sometimes positive and sometimes negative. Where we have invested money and it is going negative or whatever mistake we have done in the past. We have to learn from that mistake and note down all those mistakes so that no such mistake happens in the future. By doing this our chances of making mistakes are reduced and we keep doing better. Due to this, our benefit is maximum, but the loss is minimum. 

There are many people in the share market who make huge losses, the only reason for the loss is that they do not want to learn themselves for the share market and secondly, whatever mistake is being made in the share market, they should not forget the mistake. Don't want to improve.  Due to this, they suffer huge losses and profits are less and in the end, they end up with an overall loss.