How to start investing in the stock market?

Investing in the stock market is a great way to grow your money but we ask ourselves many Questions like Where do we start investing? Which Stock should we buy? What if I buy a bad Stock?

Today I will tell you how to invest in stock market as a beginner. Here I will tell you what are the platform I buy from and where I invest when I started Investing.

I use Zerodha to buy stocks It is a great platform and it is also very easy to understand, they have a Kite platform for individual Stocks and ETFs and Coin platform for Mutual Fund and Index Funds. I must recommend Zerodha to anyone who started their investing journey.

So the main question is, Which method is best to start investing in the stock market

I like to invest in two different way first buying Individual Stocks and second buying Index Fund.

How I buy Individual Stocks?

I follow what Peter Lynch taught us in his book “Learn to Earn” which is a great book for beginners along with his other two book in which he tells very specifically in a chapter that buy the share whose product you are using. It’s a simple strategy you only have to buy only those stocks which you use in your daily life. Like if use Lifebuoy you can buy HUL or if you make Rotis with Aashirvad Aata then you can buy ITC, it’s not a recommendation but I liked to follow this strategy because I am using the product so I know that the company product is good or bad and I can make my decision based on this thing.

“This is one of the keys to successful investing: focus on the companies, not on the stocks.”
― Peter Lynch

I also check the company growth and how many holdings their promoters have if it’s less than 50% then I start disliking the company. I also go through the profit loss and balance sheet of the company which helps me to understand how the company financially doing.

You can learn all this stuff free from Varsity by Zerodha which is best best. They explain all this stuff very easily and it will help you to look what are the important things you have to look at in the company before you buy their stocks. Don’t worry it’s not complicated accounting problems you have to solve if you know 4th class math then you can analyze enough things to buy a stock.

Why you should buy INDEX FUND?

I prefer to stick to Index funds when you are starting because it is less risky and you won’t have to read any financial stuff about the companies. In starting we have to do smart investment so we can take benifits of compounding.

An index fund is like a mutual fund that tracks the market index. Like the Nifty index fund will track Nifty 50 and the Sensex index fund will track Sensex. A Nifty Index fund has 50 top companies in India by market capitalization and if you invest in a Nifty 50 index fund then your money will be divided into all those companies and you will hold a little bit of all those 50 companies.

There are many index funds you can check on the Coin app by Zerodha but I prefer UTI Nifty 50 or ICICI Nifty Index fund because they have a less expense ratio which is very important for the long term.

I invest 50% of my money in an Index fund because if you look at the past 10 years’ data, the Index fund gives around 12% YoY which is pretty good if you look at the FD or PPF returns.

Last but not least if you want to earn lots of money from the stock market then you need patience a lot of patience because if you don’t want to take too much risk then you have to give your money time to compound.

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

Warren Buffett

In the end, I hope you find all the answers which you are looking for and now you can open your Demat account and start investing. And also check our other Article as well Click here.