If there is an investment avenue that gained ground during the covid pandemic, it is the Stock markets. With the ease of access and availability, stock market investments are no longer the rocket science it was perceived to be. As per a report from Business Standard, the markets achieved in two years, what it achieved in the past two decades. The work-from-home culture pushed millions of young people to enter the stock markets as first-time investors. This is also the reason, the number of Demat accounts opened in post covid was almost 7 times more than that in the pre-COVID times.
If we go by SBIs recent report*, ‘‘The number of individual investors in the market has increased by a whopping 142 lakh in FY21.’’
The stock market is a place that certainly respects the patient investor. Though there aren’t any laid down rules or SOPs, here we have put together a list of pointers to assist you in maximising profits:
- Begin with the end in mind: A task well begun is half done. Being clear about your objective will help you remain focused. To begin, you must be clear if your objective is trading or investing. A trader will buy and sell stocks during the day, whereas an investor will hold the stocks for a certain period. The strategies too would differ according to your objective.
- Get acquainted with the stock markets: Once you have identified your objective, begin to learn the basics of stock markets-in terms of equities, futures, and options. What are the different terms used, who is a stockbroker, what are the options available in the Demat account, etc. Turning this information into knowledge will help you decide on the online trading platform to start with. Once you are familiarised with a basic understanding, you can make use of various online resources and books to learn the basics of options trading and strategies. Options Trading in India offers numerous advantages, despite their image of being a risk-prone investment avenue. With options, you can limit your losses, hedge your risk, and derive profits through the flexibility of alternatives.
- Selecting the Stock Trading platform best suited to your needs: It is one of the most important decisions in your investment journey. Whether you earn profits, the brokerage needs to be paid. Hence, it’s highly recommended that you select the online trading platform after comparing the available options in the market. Most online stock trading platforms also offer online trading apps to give you access on the go.
- Do not time the market: The time in the market is much more significant than timing the market. Markets have always respected the patient investor. Hence, do not base your decision on tips and tricks, but on solid knowledge and research.
- Be disciplined: Whereas it is true that you cannot look back and predict the future, the past is certainly indicative of a stock’s performance. Invest in top-rated picks to enjoy the returns.
It takes a lot of knowledge, research, and patience to earn profits in the stock markets. But if you have a combination of these, the sky’s the limit for you. If not, you can always go the Mutual Fund way, wherein the experts invest on your behalf. Either way, having a Demat account is the first step in your investment journey. Take that first step and Open the Demat account today!