How to Start Investing in Indian Stock Market (Complete Beginners Guide)

This would be the most interesting thing you will read today!

Do you know if you would’ve invested just 10,000 Rs. in Infosys in 1993 what would be the value you could’ve got in 2017? It’s 2.9 Crore Rs. And not just Infosys:

No rocket science, just simply putting the money in Fundamentally Strong Companies and forget. The best part is, Everyday you are almost 90% surrounded by companies in which you can invest your money right now. How?

  • You got up in the morning and brushed your teeth with Colgate. You can even invest minimum 1123 Rs. in Colgate. One stock of Colgate is worth Rs. 1123.

  • After that you will most likely to go to washroom. In 80% case you will see Hindware (Share Price 343 Rs. ) or CERA ( Share Price 2,835 Rs.) written somewhere around you. You can invest you liked what you have just used.

  • You take a Cup of Coffee. Let’s say BRU. Liked it? Yes, You can invest in BRU too.(Parent Company : Hindustan Unilever Ltd ( 1600 Rs.)).

  • Even if you liked the packing of BRU, It is most likely to be packed by either UFLEX (295.90 Rs.) or COSMO FILMS (233 Rs) . Search it someday.

  • Getting dressed for office/college, Bought a new shirt from Pantaloons last night. Liked it? Then Invest in Pantaloons (Aditya Birla Fashion 138.55 Rs.).

  • Going to office by BUS? . (Ashok Leyland 142 Rs. or TATA MOTORS 309 Rs.) or Going by CAR ( Maruti Suzuki India Ltd 9,034 Rs. or TATA MOTORS 309 Rs.).

  • Reached office, sat comfortably on your chair and put the laptop/bag on a shiny table. If you liked it then invest in Nilkamal Ltd. (Share 1,686 Rs.) and Greenply Industries Ltd. (Share 253 Rs.).

  • While working hard in your office suddenly you felt acidity. Rush to get a ENO.Got the relief? Satisfied? Invest in ENO ( GlaxoSmithKline 2660Rs.) or even you liked the packing of ENO then YES! Its is Huhtamaki PPL Ltd ( 294 Rs.).

(its price surged 3.47% while I am tying, ask your parents how much they are getting in their FD, its 7.5% in one year).

  • You are noting down something, You might be using LINC PEN (344.00 INR). Invest!

  • Lunch Time. You might be using utensils? Invest in one of the best utensil maker. (La Opala RG Limited 254.50 INR).

  • Day over? Feeling tired? Go to Gym. Liked the gym? Invest in India's largest chain of health clubs Talwalkars 50.40 INR.

  • Back home, Switch On the AC. Using LLOYD? Satisfied? ok Here it is LEEL Electricals Ltd 135.30 INR .

  • Going to sleep? Bed is ready? Check if you are using BOMBAY DYEING’s (226.00 INR ) bed sheet and mattress of SLEEP WELL (Sheela Foam Ltd. 1460 Rs.). Good Night!

Next time, don’t ask how much minimum money you can invest in stock market. From a pen, TV, washing machine, shoes to your car, AC almost every company is public and listed in Indian Stock Exchange.

So let’s get started with your first investment.

Quick steps to follow:

  1. Ask: Just ask yourself ‘why you are willing to invest your money in stock market’. if your answer is ‘I need this money for my education to run my family and to fulfill my necessities’ then stop reading this answer and step back. Only if you have heart to gain/lose big to earn something. If you lose some then you will earn experience and if you win the sky is the limit.

  2. PAN CARD and ADHAR CARD You must have PAN card and ADHAR Card with you in order to open your demat account for investments. It's now mandatory!

  3. Learn to analyse the stock on your own or hire a investment adviser. In case you want to learn to analyse the stock then let me tell you guys It is real money that you are investing, this hard earned money should not be wasted just because you are learning NO! this is where 80% of new investors make mistake, they just open their demat account and BUY/SELL without proper knowledge. Take time ( say one month) and learn about the stock analysis, how we can analyse the stocks based on their financial numbers and ratios. Believe me, learning will become an addition for your will spend your day and night analyzing about company’s cash flows, debts, scope, net profits, dividend. one day you will become someone else, An analyst, a self dependent trader/investor who knows how to make money in case your boss fires you for no reason.

I have just made a video ‘Analyse the Stock: The Warren’s Way’ for understanding terms of stock market. You will definitely like it.

4. Choose a stock broker and open your demat account.

Demat account is just like your savings account. You put your money in your savings account whereas you put stocks ( or securities) in your demat.

Here is a collage of Some of the good brokers in India. Some free brokerage are gaining the popularity Like :

5. List out any 20 stocks you like: Make a bucket of 20 stocks that you want to trace everyday, In stock market, experience will be your best weapon and techniques will be your armor.

6) Give 15 minutes and read a financial news paper Daily: If will happen for 20–30 days that you won’t understand the terms. It’s good because you are starting from ground zero level but, after a month or two you will feel a change within you. You will able to understand terms and jargons that traders/investors use for their trades. Once you will become familiar with these word you will become addicted to read a new paper daily. You can start with BusinessLine, Business Standard or Mint.

7) Try ‘Virtual Trading’ and track your profits:

Some of the websites like moneybhai and moneypot offers free virtual trading platform where you can do real time trading from your virtual money. Take a print our of your ‘gain loss statement’ and see your progress. Take a pen and page and draw it. It will give you a feel that yes! I know about where my money is heading and how much progress I have made.

8) Watch Movies related to stock market investments:

You believe it or not but after watching these movies you will fall in love with financial market and will make every attempt to make yourself ‘The most successful Trader/Investor of the world’ Top 5 Best Finance, Stock Market Movies: a) Inside Job (2011) b) The Big Short (2015) c) The Wolf of Wall Street 4) Margin Call 5) Floored (2009)

9) You must know about the risk involved:

As I mentioned, stock market investments involves substantial risk of loss and is not suitable for every investor. You may lose more than your original investment if you will take it as a simple game play. The impact of seasonal and geopolitical events like Brexit, US elections, Demonetization, Rexit etc already factored into market prices.

The only chance of winning is ‘Make your own investment adviser’ and make your investment decisions on your own.

Every investment, Company analysis is very important. The company has lots of things to observe, See the financials, concentrate on ratios and margins, compare with peers, study about promoters, keep an eye on liquidity, make sure you know the debt, know future plans, forecast the scope, speak up with indicators and press BUY button. That's how your wisdom will save you from a massive destruction.

It seems very hard but you continue to enjoy when you learn it.

You can learn complete Stock Analysis via video Lectures here Attend Stock Market Learning Workshop in IIT Delhi on 13 Oct and 16 Oct 2018. ( No prerequisites, Anybody can join) Workshop On Stock Market For Beginners Register here : | PromoCode: EARLYBIRD

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