Investing in stocks is one of the surest ways to create long lasting wealth. With easy availability of information, knowledge and expert guidance, today more and more people are realising the advantages of equity investment. Stocks are also gaining popularity because Indians are now moving away from overreliance on real estate, gold, fixed deposits and real estate investments.
Many new investors, young people and beginners want to get into the stock market but are not sure how to start. Many don’t even get started due to lack of reliable information or are too scared to get into it because of all the news about economic uncertainty, volatility, risks etc.
However, the most common reason why beginners stay out of the stock market is that they don’t know how to start investing in stocks with little money. Or, they wrongly assume that equity investment requires a lot of capital. A misconception that leaves many deprived of the financial opportunities in the stock market.
We not only think that it’s possible but here we will tell you all about how to invest in stocks for beginners with little money. Once you get started and stick long enough with your equity investment, you can also learn how to start day trading with little money.
How to start investing in stocks with little money
For starters, do you know that you can invest in stocks with as little as Rs. 500 per month? Hard to believe? Just relax and read this simple guide on how to invest for beginners with little money.
It may sound obvious but you will be surprised to know how many people miss the obvious. You may ask, “Why do I need to save to invest a small amount of money?” The answer is that the money shouldn’t come out of your monthly expenses or EMIs nor you should borrow that money from someone. So plan to save a certain amount of money before you invest.
Start with the basics
Whether its sports, occupation, business or stock trading, you need to start with the basics. Before you start equity investment or trading, make sure that you at least have a basic idea of how the stock market works and acquire some knowledge on the stocks that you are investing. Knowing the basics ensures that you are starting your stock investment journey on a sure footing.
Important things to know include:
- – What is a demat account?
- – What is a trading account?
- – How to place a trade?
- – What is a stop loss order?
- – What is target sell and buy prices?
- – Things to avoid as a beginner such as margin trading, penny stocks, etc.
Learn to handle emotions
Emotions can be a stumbling block for many beginners if they are not good at handling it. Especially emotions such as fear, greed, anxiety and overconfidence can be detrimental if you are in the stock market. Learn to control your emotions and it will help you all your life – not just in the stock market.
Set long-term goals
Investing in the stock market is not a ‘get-rich-quick’ scheme and don’t let anyone tell you otherwise. If you want to learn how to invest in stocks for beginners with little money, starting with a long-term goal, unless you want to get into day trading.
Even if your aim is to learn how to start day trading with little money, don’t make the mistake of thinking that you will get rich by just placing a few trades. Whether you want to hold your stocks for the long-term or want to start day trading, think like a professional, not an amateur.
Research and analyse stocks
Rather than following the herd mentality, learn to carry out your own analysis when you invest in a particular stock. It’s not that tough if you put in some effort. A fundamental analysis and a quick look at some trading patterns can always point you in the right direction.
If you are yet to decide on whether you should start investing in the stock market, let Angel Broking make it easy with a free demat account, trading ideas, reports, fundamental research, and investment concepts and strategies. With 30 years of trust, Angel Broking is one of the largest, independent, full-service retail broking houses in the country.