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How do I take my 1^st step in Investing?    

 I keep hearing from people that while now they have understood the importance of investing (Stocks) and also want to do it but they just don’t know how to do it.

So, today’s article is for all those who wants to invest, however, are sitting on the fence thinking how to do it.

15-20 Min

While definitely, we will keep this article short for 15 Min approx. through there would be lot of websites & video links for you to follow and read about stock Investing.

Steps in Stock Investing:

1.     Open a Demat Account

a.      This you can open with any bank i.e. HDFC, ICICI or with stock broking agencies such as India Infoline, Karvy etc

2.      Understand the Nuances of buying and selling a stock on the terminal.

a.      This is same for all the platforms with a bit of tweaking based on the platform you are working on.

3.     Figure it out what kind of trader/Investor you are

a.      This is very important, as your strategy changes quite a bit based on this specific decision.

4.     Start reading the Analyst & Annual report of the companies.

5.     Start Investing

In this article– we will be going to each step in detail and I would be giving you some excellent links, which talks about the same and teaches you how you can do that activity.

·      

Open a Demat Account: This is an important step as Demat acts a locker for you, where all your stocks/securities are held after once you have brought them.

Therefore you won’t be able to start investing without having a Demat account. Therefore you do need a bank and Demat account before you start investing.

This is a good video explaining how to open a Demat Account:

https://www.youtube.com/watch?v=txeoPmbgixA - Open a Demat Account.

Moreover, you can just check at your bank and they will send a representative to your home to open a Demat account for you.

Just note one thing: Do compare the brokerage charges of different brokers. As it looks quite low i.e. .05% the transaction e  or .02% of the transaction, however when you are dealing with 1,00,000 it means 500 or 200 Rs during both selling and buying.

Thus you end up paying 600 Rs to your stockbroker. So, try to convince your Demat account holder that you are a serious investor and they should be able to give you either .005 or .002 brokerage charges.

·       Understand the Nuances of buying and selling a stock on the terminal.

·        

This is an easy step i.e. for buying you need to press the buy button and put the price at which you want to buy and similarly for selling – you will be putting the amount at which you want to sell your stocks and the quantity you would like to sell.

Here’s a link explaining it for IIFL account and while it will be different for all the terminals – Mostly it will be same.

https://www.youtube.com/watch?v=zRcbgKPPvEY - Trading on the terminal

·       Figure it out what kind of trader/Investor you are:

Now once you have opened the account and also came to know about the nuances of the stock Market. It’s time for you to understand the basics of stock Market and also understand what interests you in the stock Market. Is it trading or investing? Are you here for fast money or are you investing for the long term?

These are important questions and sometimes people take a lifetime to answer these questions, so it’s more like an exploration of yourself during your journey as a stockbroker. It’s definitely better the earlier you do so, however not easy most of the times.

However, there are few good places where you can start:

NDTV last year, started a series on investment and I feel it’s a good place to start:

https://www.youtube.com/watch?v=CqqikyUVI6A

https://www.youtube.com/watch?v=s4Wa2I67Rbw

https://www.youtube.com/watch?v=OHo75BolMBo

https://www.youtube.com/watch?v=artMWTTrxrw

Once you are done watching the same, I would urge you to definitely go to:

http://zerodha.com/varsity/ This is a great place to learn a lot about investing in a very simple format. Honestly, I learned a lot by going through these modules.

If you feel you know about something, then you can skip that part and speed up your journey.

Another great resource, which I like, is: http://www.safalniveshak.com

This is a website started by Vishal Khandelwal who himself is an investor and he regularly keeps sending articles to its subscribers to learn investment and also the various nuances of the economy at the various point of time.

·       Start reading the Analyst & Annual report of the companies.

This is one part which is the most boring and also most informative and will give you a lot of the information about the company and also the sector in which it is operating.  This also depends upon the person style, however just to get started.

http://zerodha.com/varsity/chapter/read-annual-report-company/ This is the basic of how you can start reading the annual reports.

And once you are good with the above steps, I am sure you are not definitely familiar with investing and would have started your journey in Investment.

Do reach out to me at prashant.it2009@gmail.com if you have any queries.

We do take sessions for school students, companies, and clubs on how and why of investing. Do let us know if you would be interested in us taking a session for your organization.