Investing is not as complex as you think. You are just few steps away from successful investing.
This post is all about introducing you to exciting world of the stock market, but right from the beginning. I have quoted some of the most noted financial experts saying few things over and over again. This post is the summary of all the expert talk you should ever listen to.
Learn all the Vital Point of the Stock Market, through comprehensive, interesting and fun info-graphic!.
Over a period of time I have been getting numerous questions about stock market which I am going to list it below. I really wish i could answer each one of them. Nevertheless this is for the young curious minds who want to start investing & also for not so curious late starters.
- How do you start investing?
- What is the investment strategy?
- Where should I invest my money?
- How can I invest my money wisely?
- Why should you invest your money?
- What should I invest 5k in?
- What does it mean to invest your money?
- What should I invest in?
- Are stocks really a good investment?
- How do I trade on the stock market?
- How do I buy a stock?
- How do I buy stock by myself?
- How much does it cost to buy a stock?
- What happens when you buy stock in a company?
- What does it mean if you own a share of stock in a company?
- What is a stock in a company?
I have spent hours and hours together to read, listen, understand, question, watch, argue and then I have concluded with this list.
I am not going to answer precisely each and every question. I am just giving an overview and most important aspect before anyone starts investing.
- 1 The Ultimate Facts for Successful Investing
- 1.1 #Tiny Drops of Water make Might Ocean
- 1.2 #Not Investing in Equity is More Riskier than Investing
- 1.3 #Reviewing Your Investment Daily.
- 1.4 #Buying & Selling Versus Holding
- 1.5 #Pareto 80/20 Principle
- 1.6 #Discipline & Patience
- 1.7 #Strategy Is Not Important
- 1.8 #Opportunity Is Between Change in Value & Price
- 1.9 #Compounding
- 1.10 #Process & Control
- 1.11 #Efficient Market
- 1.12 #Missed Opportunities
- 1.13 #Doing Nothing
- 1.14 #Emotions
- 1.15 #Conviction
- 1.16 Over To You
The Ultimate Facts for Successful Investing
#Tiny Drops of Water make Might Ocean
What is the amount should I start with?
Practical and frequently asked question. I would say to start with Rs. 500. It doesn’t really matter how much you start with. Starting is Important and Keep Investing a Little More.
Amount that would not pinch you and automate SIP that amount. Nothing else is required.
#Not Investing in Equity is More Riskier than Investing
Stock market investments or equity investment might seem very volatile. But they are not volatile in Long Term.
Should You Invest In Mutual Funds or the Stock Market?
If you understand stock market and known how to read balance sheet of companies equity Investment is for you. Mutual fund for those who don’t.
Don’t Shoo away Equity: An monthly amount of Rs.5000 in Index can make you a Millionaire by end of 40 Years.
#Reviewing Your Investment Daily.
This is a Crime.
Just because you see your house price daily that doesn’t increase the Value of your house.
It’s long term investment. You have to give it time. Time has no alternative. Stop reviewing your investments daily and focus on other aspects of your investments.
#Buying & Selling Versus Holding
Buying and Selling is the easiest thing to do. This is not Important. Even a Newbie would make a quick return with these tricks.
This is the most Important thing. Most Experts would say that Holding is the most toughest thing to do. When Investment go wrong convictions are tested. Holding is Ultimately Rewarding Yourself.
#Pareto 80/20 Principle
The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.
This is an Incredible Tool for Growing your Investments.
Pareto’s Principle or the 80-20 Rule helps you identify and prioritize initiatives and activities that can improve your productivity and success.
#Discipline & Patience
They expect returns in a very short time which rarely works in the Stock Market.
#Strategy Is Not Important
Most people focus on getting their strategy right which rarely matters. Their entire focus is only on the Strategy.
An average strategy you stick to would give more returns that excellent strategy you do not stick to.
Most first time investors are looking for holy grail investing strategy which can give them results.
#Opportunity Is Between Change in Value & Price
Change is Value and Price is not the Problem.
Stock are undervalued quite often in Pessimistic Market and Overvalued in Optimistic Market. Wrong pricing are found very often. Every good company is not necessarily an investment opportunity.
Have a macro view of your Investments. Technology and Money cannot replace Time. Give your investments the time it requires to grow.
It is not without reason that they say compounding is the 8th Wonder of the world.
#Process & Control
Have a process to enter and exit your investments. Control to stick to your process.
Review your Process on a regular basis and ensure to improve your process to get better returns in the long term.
Investors are humans we can’t expect efficient market all the time.
This is were the opportunities lies. Chances are found between greed and fear. Shabbir Bhimani talks about Control of Greed in Stock Market.
Regret of Missed Opportunities during Bear Market makes you look for more bear opportunities.
This feeling makes you miss the current opportunity. Most professional Investors are fully investment most of the time. They only keep a certain percentage of money as cash.
Activity in Stock Market hurts.
Be a all time Silent Investor. Very often leads to being a Stable Investor and generates good returns over a long period of time. It is very difficult to digest that you are getting paid to do nothing. Dev Ashish an Certified Financial Planner explain in details Power of Doing Nothing in detail.
Investments are subject to market behavior which are not in our control.
Keep a check on your emotions always. Money Excel explains how to keep a check on your Emotions.
You have to earn Conviction.
This is the most important of all. If you really want to achieve the above all you have to have conviction on what you bought and why you bought.
When you do your own research and come to a conclusion that gives the real conviction in the stocks you invest.
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Over To You
Beginners think that to invest you and make a fortune you need lot of money. Investing can be started with very little money. Investing for high returns has nothing to do with about the right strategy.
You would definitely look at things differently.
Come back here and tell us about the before-and-after. I bet you’ll have something to say!
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