Seven steps on how to start investing in share markets in India
A lot of top investors have earned enough money by generating returns in the range of 35-60%, and they have easily earned a lot of money and profit because of their years of experience in share markets.
A lot of people do generate low returns and lose money while they are investing in the share markets.
Here are seven steps on how you can start investing in the share markets if you are a beginner:
- You need to screen and filter the right kind of stocks using the financials
- Make sure that you select the companies that you understand and completely aware of
- Find out the companies with a more sustainable moat
- Find the low debt level of companies
- Use the financial ratios to identify the right stocks for your investment
- The honest, transparent and competent management
- Find the right price in which you can buy the stock
It is important to learn the approach of investing money and then gaining profits because if you invest in the right ways and earn a profit of Rs 5000 by investing Rs 10,000, then you can easily use the same approach for Rs 10,00,000 and make a profit of Rs 5,00,000 in the future.
Different types of investing: Trading vs. value investing
It is imperative to learn the two investing methods because it will further help you a lot with investments. The trading investments focus on making profits frequently in a short time, irrespective of the market’s rising and falling.
When there is a rise in the share market, then trading involves buying at a lower price and selling at a higher price in a short period.
There are profits in the falling market by selling at a higher price and buying at a lower price. Trading involves everything in a short period of time and can be risky also.
When it comes to Value investing, Warren Buffet said that you should always make a decision to invest in the companies that you can hold forever.
The advantages of having to hold stocks for a longer period of time are dividends, rise in the stock prices, and stock splits. Your investments can grow profitable than before if you hold them for a longer time.
The other advantage is that the investor gets to study the rise and fall in the market because of the external events taking place with the belief that the stock price will recover soon.
There are benefits of holding value investing because it will help you give profits and study the factors that can affect the market so that you will understand even better before investing your stocks.
The share markets keep fluctuating, so it is important to understand the companies and understand which is the best place to invest your stocks, and then you can move forward.
The rise and fall in the share market will affect the stocks, but it will help you in gaining profits if invested correctly.