Are you willing to explore the international stock market for better return compared to Indian stock market? Do you think you have enough knowledge and spend enough time & money for Indian stock market and its time to invest in international stock markets from India? Then this article will be helpful to you to take your first step towards share market.
How to Get Started in the Stock Market
Investing in the stock market can be extremely rewarding and profitable, but due to its unpredictability it’s possible to make a loss just as easily, particularly if you don’t have prior experience. Conducting ample research on who, what and how you plan to invest before making your initial investment will get you halfway there, but in the meantime let’s look at a few tips to help you get started.
Identify what kind of person you are
Are you a risk taker, a risk averse, or are you somewhere in between? Make sure you identify this before starting – particularly if you’re someone who’s willing and ready to throw large sums of money into uncertainty.
For those who often act irrationally Do you prefer certainty? How would you react to a 20 percent drop in your stock in a single day, or say a 40 percent drop over a number of weeks? Will you sell it all in one careless panic, or will you ride out the waves?
The good thing about the stock market is that there’s room for everyone. While some stocks require a lot of time, some don’t, so make sure you do your research and invest in the right kind of stock that will suit you investment motives.
For first time investors, you may want to seek guidance from a reputable brokerage company who can help identify the options available to you, depending on your . There are various Online Share Trading Platforms available. Look for one that offers free trailers as well as low starting rates, such as CMC Markets, Commsec, HSBC Online Share Trading, Invast, nabtrade, Westpac Online Investing
Pick up the stock dictionary
Understand definitions before you jump into the market. Know what a dividend is and invest in companies that give them to their shareholders. Define earnings per share market capitalization, price to earnings ratio, outstanding shares, and such terms. It is only after you understand it that you can successfully be a part of it.
Understand the why, the how, and the when of the market
The stock market is notoriously unpredictable, and stock prices are always going up to then fall back down. Often advice for first timers will tell you to focus on the price; to buy when the price is low and sell when the price is high.
However, it isn’t as simple as this. The price of a company’s stock provides very little information about the market value of an organization. When a stock’s price fluctuates, it is only an indication of many other factors on play, so do not focus only on the price going up or down; focus on all the other factors surrounding this.
Build a healthy portfolio
Rule number one, never put all your eggs in one basket. Do not invest in a single stock. Diversify. It doesn’t matter if you own shares in the most successful company in the world, even the most successful of companies can have their problems which is why it’s so important to diversify.
Do feel obligated to choose between different types of stocks when you can have both. Be very skeptical. Ask yourself if a particular stock can increase in value; if a company will still be relevant to the world in the future and if it still has room for expansion.
Take your time, and remember that the stock market is the one place where you will not be penalized for not taking a swing. Like they say: better to have a small part of something big, than a big part of something small.
Where to invest
After you’re able to gain an understanding of the financial jargon it’s time to pick the right companies to invest in. New traders often don’t know what to look for, and that is okay because this way you will be forced to look wider and deeper into the market so as to find the right stock to buy. There are two categories of stocks, and you should have both in your portfolio – growth stocks and dividend stocks.
For growth stocks, you want to buy them at their worst, and sell them at their best – you basically buy low and sell high. Over-investing in risky companies will lose you all your money, but if you carefully choose the company, then you will see steady returns in a while. Dividend stocks are safer since you trade in a company that pays dividends to its stakeholders. If you want stability, then this would be the perfect fit for you.
Like any kind of investment, investing in the stock market does come with risk. While there are those who profit greatly, there are those who make losses. Spend time studying the stock market so that you’re able to gain an understanding of how to works prior to making an investment. First time investors should start small, and never bet more than they can afford to lose. If in doubt, seek advice from an independent financial adviser before investing in international stock markets from India.