beginners can invest

Investing is a way to set aside money while you are busy with your life but you want to get a good return from your savings. Investing is a means to a happy ending. The goal of investing is to put your money to work in one or more type of investment vehicle in hopes of growing your money over-time period. There are so many rules that you need to know before investing anything.

 “…the process of laying out money now to receive more money in the future.”

Legendary USA Investor Warren Buffet

What Kind of Investor are You?

Befoinvestingest anywhere, you need to know one question: what type of investor are you? When you going to open a brokerage account, an online full broker like Angel Broking or IIFL Finance will ask you about your investment goal.

There is mainly three type of investor present – Short Term Investor, Medium Term Investor and Long Term Investor. Some investor wants to make a profit within days or within 2 3 days, they are Short Term Investor. So investors want to take their investment for more than 1 2 months but less than 1 2 years than their known as Medium Term Investor. Where some investor wants to invest for more than 2 years they are like “invest it and forget it”, they are Long Term Investor. So you need to know about your investment kind from these before investing anything.

Start with Small Investment –

If you are a beginner, you always go with a small investment. Never put all your money on the market in the beginning. If you put all your money you can lose all in one time. For beginners, it’s more important to learn than to earn. If you lose some amount from the market that will help you to learn about the market. So you can even start with an amount of ₹ 1000 or ₹ 2000.

Diversify Your Portfolio –

It’s really important for beginners to diversify your portfolio. Beginners always invest a minimum of 10 stocks from different industries or different company in the same industry. Beginners need to always remember that never invest more than 10% of their portfolio in one company and 25% of their portfolio in one industry. If beginners do that then any company or industry do bad performance anytime they can minimize their loss from the other company or industry. That’s the one way beginners can start their investment.

Invest in BLUE-CHIP Stocks –

Blue-chip are the stocks of those reputed companies who are in the market for a very long time and financially strong. Blue-chip stocks are market leader of their sector and have a good track record of consistent growth and returns in the past many years. Like HDFC Bank in private banking sector, TCS in IT software solution sector etc.

Invest in What you Like, Know and Understand –

In the World, There is four types of human nature present – love, like, dislike and hate. If you love any company products then buy that company stock. Like in India maximum parents tell their children “Colgate Karlo” in the morning. They never tell “Toothpaste Karlo/ Brush Karlo” because Colgate gained trust in India over many years. Now Colgate holds a 60-70% market share in the toothpaste sector in India. If you like any company products, you need to see others like or dislike them, if they also like them, you need to buy that company. Any beginners who dislike or hate any company product then they need to avoid these company.

Don’t invest any company or any sector where you know nothing about that. Always invest that company or sector what you know. Like if you are a IT Engineer then you know about IT sector and if you go Starbucks and use Tata Salts then you know about Tata Consumer Products Ltd. company.

Never Invest in ‘FREE’ Tips/Advice –

This is the biggest reason why people lose money in the stock market. They do not carry any research on the stocks and blindly follow their friends/colleague’s tips and advice. Everyone wants profit more than others, so friends/colleagues can give you bad investment advice that you can get lost money that.

Avoid Blindly Following the Crowd –

Herd mentality is not good at all in the stock markets. If you follow the crowd you can lose your hard earned money easily.

Invest Regularly –

The stock market investment gives the best returns when you invest for the long term. Do not invest in lump sum wait for any stocks to fall down some amount then buy more amount of stocks and invest regularly. If you do it for 10 years you will get good returns from the stock market.

Lastly, always follow these rules if you want to be a great investor in the upcoming 10 years. If you don’t follow these rules then you can lose your hard-earned money easily.

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