Before you start investing in the stock market, you need a demat account. Nowadays you can opt for online demat account opening which is easy and hassle-free. After you have got your demat account you shouldn’t just start investing in the market. You should do your research and learn things. In this article, we will deal with five tips that will help stock market beginners to earn money from the stock market.
Table of Contents
1. Start saving to invest
The hard truth is you need money to earn money from the stock market. Stock market can grow your wealth but for that you need to invest some money. Start saving certain amount of your income every month. You can save 10% of what you earn and invest it in the stock market. The amount of money you would save depends on your age.
If you are young, you have less responsibility you can save a lot of money. Use that money to invest in the market. As you grow older, your capability to save from monthly income decreases.
2. Don’t go all in
Stock market is unpredictable. You never know when it will change its trend. You have to hedge your portfolio. And you would want that your portfolio is in green all the time. The best way to insure that is by diversifying. Hold stocks from many different industries. When one industry is not performing, it will not affect you much. It would be better if you are diversifying your investment as well. Don’t go all in stocks. Buy some mutual funds, debt funds, government securities and have some money in FD as well.
3. Be realistic
Most people are attracted by the lure of this industry. They think that this is a get rich quick scheme. They want to double or triple their money in a very short span of time. The ambition to earn higher return is the reason why so less people are able to earn money from the stock market. You should take this as a business. Is it possible to grow your business by 100% in one year? No, right! So why you want to double your money in such a small span of time! Be realistic in the market.
4. Practice paper trading first
If you want to be a trader, you should start with paper trading. You should not use your hard earned money directly into the stock market. Learn all the basics, understand your strategy and only then use real money. You should have confidence on your strategy before you go out into the market.
5. Do not try to imitate big investors
Many beginners try to imitate the portfolio of big investors. This can drain your money like anything. You should never imitate others. Nor should you invest in the market based on stock tips. Do your own analysis and then invest in stocks.
To sum up
You need a demat account before you can start investing in the stock market. You can open a demat account with 5paisa.
Also read: Things to Know Before Getting a Small Business Loan
