Kickstart your stock investment journey

Investing in the stock market is seen as a risky venture one should stay clear off to avoid losing money. This is because we know stocks only as the high stakes trading that happens in the market, but it’s much more than just trading.

 Here are 8 tips to kickstart your stock investment journey with confidence

1. Understand your approach to investing - Do you prefer to trust your knowledge and instincts while investing? Or are you more comfortable trusting a financial advisor to guide you on your investments? As a newbie it is best to base your investment on good financial advice from a reliable source. Many investment platforms provide a virtual advisor who will recommend stocks based on your preferences and investment goals. A financial advisor can hand hold you through your investments and make investment decisions in your best interest backed by data. BranchX investment recommendations, helps you with choosing the right stocks and also educating you on the basics of investing.
2. How is Investing different from Trading? - Trading is like buying a pack of seeds for Rs 100/-, and selling it off immediately for say Rs 150/-. Investing is to plant that pack of seeds, nurture the seedlings until they mature and reward you with a whole new crop of seeds which is much more than your initial investment. You sell this new crop of seeds to make a larger profit. Investing takes time and patience and you will not see immediate benefits but over a long period, say a year or more, you will start booking profits. Investing for the long-term is better since the risk is low as compared to trading.
3. Opening a brokerage account – To start investing you will need a demat account. In the current market there are a number of apps that will allow you to invest with zero transaction charges and even with multiple brokerage accounts listed. However, BranchX, brings all your favourite brokers to one app and will help you create your account by quick submission of documents online, for verification, so you can start trading instantly.
4. Budgeting your investment – Set aside a fixed amount every month to invest in stocks. This will help you build your portfolio without breaking the bank. From your allocated budget it is recommended to invest 60% in mutual funds and 40% in individual stocks. You can invest as little as Rs.500 in mutual funds. When you invest in mutual funds you hold a small percent of stocks in each of the companies in the fund e.g., Nifty Bank Index Funds. Mutual funds also provide you with tax saving options.
5. Diversify your investment portfolio - Build a diverse portfolio to protect your investment against market conditions. Since the market is not without risk, a diverse portfolio will help you weather market risks while yielding a higher return. The base idea in diversification is to spread the risk around by investing not just in stocks and mutual funds but also in commodities, currencies, gold, exchange trade funds (ETF) etc. At BranchX you will get access to a bouquet of products to invest in.
6. Creating your portfolio – As a beginner large cap companies will be a good option to start investing in. Select stocks of companies you know, whose products you consume. Include stocks from a good range of high performing sectors like Banking, telecom, pharma, technology etc. Do not put all your money in a few stocks instead spread it across 15 to 20 stocks. Make sure your portfolio is manageable. Too many stocks will be overwhelming and difficult to track. BranchX brings you a direct stock systematic investment plan(SIP) that will allow you to start investing from as low as Rs. 100.
7. Focus long term - To get the maximum benefit from your investment portfolio focus on long-term investments. A good rule is to invest for 3-5 years in steady performing stocks. As the company grows so will your share price thereby giving you good returns. Short term gains as in day trading are quick but are comparatively less in margin. Long term investments have a greater profit margin. The key to greater profit is to be patient and let your investment grow.
8. Understand the market – Learn about the market, understand the investment options and gain a basic knowledge of how the market works. This will help you make better informed decisions with regard to your investment thereby building a robust portfolio. Xenie endeavours to educate it’s investors and provide you with tips to invest.

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