Stepping Stone(Stock Market)

When you say the word Stock Market, First thing comes to People’s mind is fear.

People thinks that it’s a gambling place or some kind of money-eating market.

I am from India, I did not what is meant by mutual funds or the stock market, etc. until the age of 23,

I was once at the same spot which I described but you have to change the trend and create awareness, and this article is all about stepping into the Investment area – Basic things you need to know!

What is a Stock?

If you buy things, say 10 apples for 10$/apple and sell it for 11$/apple, This is physical trading but In the stock market you would buy/sell stocks.

A stock (also termed as equity) is a financial instrument that reflects ownership of a portion of a company. “Shares” are the units of stock. You could buy or sell as many as shares you need.

Where these stocks get stored?

Your stock is held in a DEMAT account. You will first move your funds to a trading account, and then any shares you purchase will be sent to the DEMAT. In India, there are two depositories are available: (CDSL) (CENTRAL DEPOSITORY SERVICES INDIA LTD and NSDL NATIONAL SECURITIES DEPOSITORY LTD) to safeguard your Shares.

Trading vs Investment

If you want a huge amount of money and you buy few shares and sell them in a day or a week or a month, It is known as Trading. If you want a decent figure in your bank account in 5 Years or 10Years, You have to create a portfolio, buy various stocks and wait. Then, It’s known as Investment

Intraday Trading – You buy/sell stocks in a day with minimal returns but high risk

Swing Trading – Swing trade is a pure speculation financial markets trading strategy where a tradable asset is held for one or more days to benefit from price changes or swings.

The above figures represent the trend difference between SENSEX(Indian Market) vs Dow Jones(US Market) Image Credits: TimesofIndia and https://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years

The thing I just want to let you know from my trading experience is that the Indian Stock Market is more Bullish and Bearish than the US market where the US market is stable one

That’s why I choose Investing or Trading in the US stock market

Rules for Trading?

  1. Never trade or invest in Penny stocks
  2. Never buy a stock at a high-price
  3. Sell when you feel it’s time to sell
  4. Setup the stop-losses beforehand
  5. Control your emotions
  6. Patience is the key
  7. The most important point is “Never quit”
  8. Divide the net amount and trade-in 4to5 companies
  9. Analyze the market regularly

How to invest/trade in a Good Company?

  1. Research the company’s technical fundamentals like Market Capital, R/E Ratio, ROE, Book Value, etc.
  2. If you can read the chart, then do an analysis on the Company for a while and Do check the support/resistance level in prior
  3. Never give up on the company once you have invested

What are the Best Apps to Trade/Invest in India?

  1. Zerodha
  2. Groww – I would recommend this app because of the user-friendly environment
  3. INDMoney

The Brokerage rate for selling is very less for the above apps and all are SEBI registered.

How to invest in the US stock market from India?

  1. INDMoney – This app offers you to invest in foreign companies with a 20$ withdrawal fee
  2. Groww
    • Both apps were registered with few companies, check them before trading.

You need to open a US account and send money through the remittance process and then you can trade

Best Companies for trading in the Indian market?

  1. ADANI
  2. MRF(Highest Stock Price)
  3. Bajaj
  4. TATA Group

Best Companies for Investment in the Indian market?

  1. Reliance
  2. TCS
  3. HUL
  4. CDSL
  5. ITC
  6. D-Mart
  7. AXIS BANK
  8. SAIL
  9. INFOSYS

Again, Everything is temporary

You have to choose based on your Investment/Trading Protocol

Best Companies for trading in the US market?

  1. TESLA
  2. AMAZON
  3. Facebook
  4. Netflix

Best Companies for Investment in the US market ?

  1. APPLE
  2. MICROSOFT
  3. ALPHABET(But it is already at the Peak)
  4. Facebook
  5. NVIDIA Corporation
  6. Johnson Johnson
  7. Netflix
  8. Intel Corporation

Do the segregation by sector wise such as Automotive, Pharmaceutical(Globally Trending because of COVID-19), Bank/Financial, Commodities, Technology, etc.

Remember!

  1. Fixed Deposits
  2. Mutual Funds
  3. Stocks
  4. Crypto’s(Bitcoin)

Returns in % for a year

  • 5-10
  • 10-50%
  • 101%
  • 1000%

Risk Analysis

  • Very Low
  • High
  • Very High
  • Ultra Pro High

Choose Wisely😃

Warren Buffet’s favorite quotes

1. “Never depend on a single income. Invest to create a second source.”

2. Risk comes from not knowing what you are doing.

3. It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price

4. Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

– Warren buffeTT THE LEGEND
I would recommend you to watch this series SCAM 1992 – such an amazing one.

If we look at the number of people who invest directly in the stock market, it’s less than 1% of the overall population, and if we look at both direct and indirect investments, it’s just 2 to 3%. Indirectly, this refers to investments made by mutual funds, life insurance companies, and other similar instruments available in India. – Because of Fear, The Bullish and Bearish market

This needs to change and we have to create awareness, Never Quit Trading!

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