Everyone who participates in the market will experience their share of profits and losses. Before you generate wealth, you are going to makes mistakes in the investment market. With these mistakes, you will learn and build your wealth. If you feel you have inadequate knowledge you need to start with a small amount. With an amount as small as Rs1000 you can learn the basics of the investment market and enhance your skills eventually. Let us learn how to invest 1000 rupees in share market.
If you want to know how to invest in share market following tips will come in handy.
You need to learn about the rudimentary functioning of the share market. Before you master and earn from the market you need to understand the technical terms which are used in the day to the day investment market. These technical terms can be confusing at first but with time those terms will make sense to you. Having adequate knowledge will help you make informed decisions. When you invest Rs. 1000 your sole aim is to learn and do not earn. With this goal, only you can enhance your financial knowledge initially.
Initially when you begin the investments you can seek professional advice from the right stockbroker. It is important to select the right stockbroker and not any stockbroker. Stockbrokers have experience and enough knowledge to guide you through making various financial decisions. Stockbrokers can advise you and throw light whenever you are confused. Instead of trusting free advice select stockbrokers who have been around in the business for quite a long time.
Initially start with a small amount and invest Rs. 1,000 in the share market. When you start with such a small amount and go for multiple stocks you have limited options. Suppose you wish to purchase multiple stocks of each worth Rs. 300, then you can buy three units of that stock. Of course, the stocks worth more than Rs. 1000 are out of the picture. When the investment amount is Rs. 1000 the goal should not be diversifying the portfolio. Hence selecting multiple stocks is not worth the time and effort.
As a beginner, you are not stock savvy so just go for stocks from the Nifty or Sensex basket. The stocks of the Nifty basket mostly belong to the heavily regulated companies that are scrutinized and have higher growth potential in the longer run. The 1000 rupees you invest will either buy 1 share of Reliance or 7 shares of ONGC. In these baskets, you will find themed grouped stocks such as Bank Nifty, IT, Oil and Gas, Telecom, so on. Select the one which best suits you and will yield higher returns in the future.
If you don’t have adequate knowledge of a company and you can always go for blue-chip stocks. Blue chips are the stocks that belong to the reputed companies who are old and present in the market for a longer time. These companies usually have a good track record of growth, financially strong, and has yielded consistent and better returns in the past many years. Some of the examples of blue-chip stock companies are HDFC bank, Larsen and turbo, TCS, so on. A few other examples of blue-chip stocks are Reliance Industries, Sun Pharma, State bank of India, etc. The strategy here is to avoid investing time in researching stocks. As your first investment and considering the amount of investment you need to spend weeks researching different stocks.
Another easy way to start with the investment market is by investing in dividend stocks. However, keep in mind that with such a small amount it is not a great idea to expect a lot of dividends. So, prioritize the quality stocks that appreciate in terms of value. Eventually, your portfolio will grow, and you will earn more money. Re-invest this money and re-shuffle the allocation of the assets to bring in more dividend stocks. With more dividend stocks you can generate a steady flow of income.
Rs. 1000 in the share market isn’t much to lose hence don’t stress over if losses are incurred. You won’t go bankrupt even if you lose 50% of your investment amount. The only aim here is to learn and not to earn. Have a disciplined approach to investing. Make habit of monthly investment and keep aside a part of your income every month. You will not become rich overnight with the share market but eventually, with small amounts, you will create a corpus of wealth. With discipline soon you will wish to learn how to earn Rs. 1000 per day in share market.
To make the question of how to earn from share market easier read below to learn which things you should avoid.
When you are a beginner you may get enticed by big brands. However, you should have enough knowledge of the company, the industry type, and their product. Investors with all the knowledge about their stocks will always have the upper hand over investors who know little about the industry itself. For instance, a surgeon will have a better understanding of how well or bad a surgery robot is performing their task, similarly with enough knowledge only you can learn how well the underlying stock may perform.
Don’t make emotions come into play when you are learning how to invest in stock market. Being impatient with investments is one of the emotions which needs to be avoided. The stocks you invest in may need more time to grow as compared to the time you may have predicted initially. The companies may rollout growth strategies but may take months when those strategies start playing out. Investors tend to become impatient and expect soon from such stocks which can harm their investment plans.
When you are learning how to invest money in share market it’s important to avoid a herd mentality. When you observe most investors are investing in a specific stock, it isn’t necessary that you too must invest in the same stock. As your financial goals and risk appetite may differ according to your investments. Keep your financial goals in the mind and invest in the stock market accordingly and not what others are doing.
Don’t build unrealistic expectations in terms of the performance of the shares. You need to scrutinize and look at the historical performance of the stock. Analyze the other investments that are competitors within the same industry. Based on their previous performance, you can create a picture of the volatility of the shares. Typically, a stock will continue to grow as it has in the past, this way you can figure out how much to expect from a stock.
There’s nothing wrong fundamentally with lump sum investment but it is right to wait till you learn more about how to earn from share market. Wait till you become proficient in the functioning of the investment market. To conclude don’t risk by investing a lump sum amount initially and start with a small amount. Small investment amounts will incur small losses which won’t hurt you much.
This brings us to the conclusion that even a small amount of investment can be a good start off to a long investment journey. Once you have even a little amount in the share market you will become keener to learn about how to earn from share market.
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