First of all, happy that you want to start with Investing and not trading.
Now few points for your start in the Investing world:
- Start with an amount that you are comfortable with. Even 5000–10000 is a good enough amount to start with
- Invest in a business you understand - Dont follow herd mentality or tipsters. Try to learn the knitty gritties of one industry first and then invest in a company whose business you understand
- Invest in uptrend and not in downtrend - As a beginner never invest in a market which is going down. If the Nifty has been going up for past few days then its a good time for you to invest. Pick a basket of 4–5 stocks and invest.
- Realistic Expectations - You would have heard the story of Eicher Motors going 100 fold and Infy making many rich. But don't start with expectations of getting rich overnight. Greed is the biggest enemy in financial markets.
- First Buy - Ideally invest in a stock which you know about and see in daily life. For example- Maruti Suzuki, HDFC Bank, ITC, Yes Bank, HPCL, Bata, Coal India, Colgate India, Hindustan Unilever etc.
There are tons of companies whose products/services you already have been using and might be more than happy with them. Find out those companies and investigate them.
Lets say you want to invest in automobile industry. Try to find out which car company has growing sales and revenue. Which car company has been coming with new models which have been successful.
- Absolute no no for Penny stocks - Dont invest in any stock which is priced less than 20 Rs or have a market cap of less than Rs. 100 crores. Although you might double your money soon in some rare scenarios, but most probably you will end up losing most of your money if you invest in any penny stock.
- Read as much as you can - Investing is one of most widely researched topics, and there are many good books available on the internet on the same. The more you read the better you will become at the art of investing.
We have a group of traders discussing trades and markets daily on Slack. Join us here - bit.ly/arithmos