Tuesday, November 24, 2020

Golden Rules for Investing in Stock Market

 Primarily, you need to have Bank Account, and then one must open a Trading account with a Stock Broker (Zerodha, ICICI Securities, Angel Broking, Upstox, Smallcase, etc) and finally a Demat Account with Depository Participant [DP] (NSDL / CDSL). You need to fill the e-KYC form.

After the approval process, you can start investing in Equity, Mutual Funds, Derivatives (F&O), Govt. Bonds, IPOs, etc. You can trade by yourself or with the help of Sub-Broker assigned to you by giving POA (Power of Attorney) rights.


1.   Pick up the Stock in particular sector in Sensex (BSE) and Nifty (NSE) based on Standalone / Consolidated Valuation (i.e. Market Cap, P/E, Book Value, Face Value, etc.)

2.   Decide whether you want to be a Short-Term trader or Long-Term Investor.

3.   Buy Shares of Company whose Business you understand. Check last 5 years performance of Company.

4.   Diversify your Portfolio. “Don’t put all Eggs in single Basket”. You should avoid investing all your savings in single investment options. Instead, spread your investments indifferent market schemes. If you happen to lose money in one or two stock, then you have chance to earn in other stocks

5.   You should invest across value and growth Stocks.

6.   Don’t sell your shares in panic due to market fluctuations as stock price goes up and down commonly in day-to-day trading.

7.   Monitor your Portfolio regularly. Check on progress of the Companies on whose shares you have invested in. Read Research reports of the Company status.

8.   Invest regularly to have better returns and secure Wealth at the time of your Retirement.

9)  Build Patience and gain knowledge on financial markets from time-to-time.

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