January 16, 2012 by akhilendra
How to start investing in stocks
How to start investing in stocks
How to start investing in stocks is the first thing which will come to your mind when you think of making money in stock market. How to get started investing sounds like a complicated term for the beginners in stock market but with development of technology and flurry of brokers in the market, it has become extremely easy for a beginner to invest in stocks and mutual funds in India.
With the growing urban population in India, amount of investors have also gone up significantly and it has attracted lot of stock brokerage firms. With the growing awareness among investors, Security and Exchange Board of India (SEBI) has also taken lot of steps to improve the process of registering and investing in Indian stock markets.
Before you start investing in stocks, there are few questions you should ask yourself;
Purpose of Investing – now I know you would be thinking that this question is not important as everyone wants to make profit in stock market so the question doesn’t hold any value. But think again, this is the most important question in today’s world. There are other alternatives to stocks for investment in the market like mutual funds, Gold and real estate. They also require some research and study, but the amount of research you will be required to put in stock is much more than that. So invest only in stock, if you have patience to hold on to the learning curve. The purpose for investing in stock should be long term gains and not the short term overnight fortune killer gains.
Risk Appetite – as mentioned earlier, like purpose risk appetite is also very important for investment in stocks. Stocks are financial instruments with high risk therefore if your risk appetite is low then it’s better for you to invest in mutual funds and gold.
Time frame – time frame is one more thing which you need to clarify with yourself before you start investing in shares and stocks. Time frame is the basic fundamental of any investments, from mutual funds to stocks. But in case of stocks, it is even more critical. Choice of stock will vary in most of the cases for short term, medium term and long term investments. So more often you will find a stock which will be good for a particular for one time and not so good or bad for some other time frame.
Once you are done with these questions and want to proceed ahead, you need to open a account with any broker of your choice to invest in shares. Brokers are a very critical part of the investment process so be careful before you select your broker. You can open offline or online investment account, but in today’s world, I will recommend to go for online trading account. To read more about HOW TO CHOOSE YOUR BROKER, CLICK HERE.
Once you have the account ready, you can start investing straight away but don’t rush into this. Invest systematically and try to learn the process of investment. Investment in stocks is art and science, so you will have to be very careful. Any uncalculated move can result in the severe financial loss. To know more about HOW TO INVEST, download your free ebook to learn Technical Analysis.
Useful books on Stock market and investing in it.
Everything You Wanted To Know About Stock Market Investing
facebook.com/profile.php?id=100003406397747">Nozipho - August 6, 2012 @ 1:32 pm
Seventy-seven years ago, members of Congress erceetd a tariff wall aimed at protecting American business concerns. The result was a stock market crash followed by drastic retaliatory tariffs and a shutdown of the global trading system. The 1932 Revenue Act made matters worse by massively raising marginal tax rates on domestic incomes. These blunders set the stage for the Depression and world war that followed.Current members of Congress appear to have let their history books collect dust: A raft of anti-China currency and tariff legislation is now widely supported by both political parties as the exigencies of political grandstanding subvert the ideals of sound policy. At the same time, Chinese government officials have threatened to dump some of the government’s $1 trillion in U.S. Treasury securities if Congress continues its currency bashing and tariff threats.This fiscal folly couldn’t come at a worse time. Financial markets have been reeling over the last several weeks as hedge funds deleverage from wrong-way bets on mortgage products. It certainly doesn’t help matters that a tone-deaf Congress, led by a bi-partisan coalition of the economically obtuse, is attempting to advance legislation that would raise tax rates on investment companies as part of a “fix” for the alternative minimum tax (AMT).Has anyone in Congress ever stopped to contemplate why London has once again become the financial capital of the world? Perhaps it has something to do with the fact that the rest of the world is lowering corporate tax rates and trying to moderate regulations while the U.S. is stuffing Sarbanes-Oxley down the throat of its businesses.If that weren’t bad enough, the 2001-03 tax cuts on incomes and capital are essentially on the chopping block, set to expire in several years time unless Congress and the president act to extend them. The current Congress isn’t disposed to extending the tax cuts, while online futures trading points to a Democrat sweep in 2008. In other words, there’s a high probability that tax rates are going up.Some politicians argue that the current anti-trade sentiment has been driven by wage inequality and poor income growth, “tax cuts for the rich,” and high energy and food prices for the poor. But the data refute this. Personal income has grown at an average pace of 6.2 percent since 2004, despite large swings in reported GDP growth; personal income is up 6.1 percent year-over-year as of June, right in line with the average of the last few years. And thanks to a low unemployment rate and a tight labor market, real non-supervisory wages are growing faster today than they were at this stage of the last cycle (1.6 percent vs. 1.3 percent, year-over-year).In fact, low-end (non-supervisory) real wages have grown at about twice the pace for this cycle compared to the first 23 quarters of the last expansion. A broader measure of real non-financial compensation per hour also shows superior wage growth during this cycle (1 percent per annum average vs. a 0.3 percent per annum average at this stage of the last cycle). So to call this a “wage-less” expansion is utter nonsense, despite the fact real GDP growth has averaged 2.7 percent per annum this cycle versus a superior 3.3 percent average at this stage of the last cycle.Attention protectionist stooges: Since the implementation of NAFTA in 1994, real non-supervisory wages have grown at an average pace of 1.2 percent per annum, triple the 1971-2007 average of 0.4 percent per annum. Inflation-adjusted household net worth has jumped $22.2 trillion since NAFTA was implemented while non-farm payrolls have increased by 24.9 million. Manufacturing output, far from falling, actually stands at a record high, and is up 62 percent since 1994.Undoubtedly some have been left behind by the global economy. But free trade, China, and Wal-Mart for that matter have dramatically increased the standard of living for most people, just as protectionism, a trade war, tax hikes on investment and work, and the absence of Wal-Mart would sink living standards for most people.While the global boom continues on the back of pro-growth policies around the world, Congress is speeding down the road to ruin with trade protectionism and a raft of untimely tax hikes. It’s time to take a detour and think about the hugely anti-growth consequences of turning our backs on the global economy and pro-growth tax policy.