My experience with Share Market and investments

This article is all about sharing my experience with share market and related investment. The articles gives some tips that I learned during my share market activities. These tips are my own experience which might help others.

Everybody lives in a fast moving world and money is one which regulates everything. When it comes to investment of money, people try to avoid the share market due to its highly volatile nature. I personally choose share market because of high return one gets if the right stocks are chosen. Share market requires patience and knowledge. One cannot blindly buy and sell shares to get returns. Here is what I have learned so far about share market.

How I have started to invest in Share Market

One of my friends advised me to invest in the share market to get high returns but I was a novice in the share market that time. Thus, he advised me to learn about share market and related activities by virtual portfolio in money control website. By following his advise, I started maintaining the stock portfolio and that makes me somewhat familiar with stock markets and related terms.

Once I got sufficient experience in stock markets via the virtual platform like money control, I started investing in stocks on a monthly basis and with a Systematic Investment Plan. I preferred to invest in ITC per month. I chosen to buy three share of ITC per month. The SIP date on which ITC shares are bought for me was 15th of every month. The total amount limit was 1500 Rs which means, I can only buy a share order for ITC when total amount is less than Rs. 1500. I continued this till one year (from March 2013 to February 2014). By this SIP method, I had invested and accumulated Rs. 25000/- when my last three ITC shares were bought by SIP. Rs. 25000 + return on this amount was useful to change or modify my portfolio.

This was my first SIP. I then started choosing various company stock based on history, company fundamentals, dividend history and reputation. Here are few of my learning during investment in stock market.

My learning from Stock market investment

Never rely on the advice of others. Instead make decision based on technical and fundamental point of view
Do not simply invest in a particular stock because it has done well in past. The current situation of the company might affect the future stock price.
Do not listen to everyone but choose stock by making necessary home work.
Try to choose those stocks which are part of Sensex and Nifty
Always prefer those stocks which are part of leading mutual fund investment schemes
Invest when company has huge potential for growth but current situation is worst.
Always prefer those stocks which regularly give dividend and good return.
Do not simply buy a stock because the same stock is in your friend's portfolio.
Always make own rule to exit and enter in a particular stock. Never stick with same company because you love its brand or company itself.
You have to upgrade your current knowledge by reading leading newspapers like Economics Times, Business Standards etc. Always have a habit to watch business channel for 30 to 60 minutes to get latest updates in the current market conditions

Conclusion

Always choose stock with good fundamentals. Do not simply imitate the trends but try to analyses the current situation of company and market. Read more and get knowledge. Update portfolio to be on profit side.

Article by Dr. Paresh Gujarati
The author is a mechanical engineer (B. E., M. Tech., Ph. D.) by profession and has a passion to write a simple but effective content that can help every layman to know more.

Follow Dr. Paresh Gujarati or read 124 articles authored by Dr. Paresh Gujarati

Comments

Author: Partha K.16 Jan 2016 Member Level: Gold Points : 6

A very good article for the newbies in the share market. Generally, common investors don't have the technical know-how to judge the intrinsic value of a particular script. So they blindly follow another person who has made a good profit from a particular script. This is called 'herd' mentality and results in purchasing a script when it is highly priced, i.e., purchasing a script at a wrong time. Because of this 'herd' mentality, common investors can't make profit from share market. Common investors get unnerved by the gyrations of share market and take unwise decisions. Furthermore, day trading and short-selling also cause loss to the common investors.

I personally invest very small amount in share market (mainly in very select Bluechip scripts), because I know that I don't have technical competence to judge the timing of purchase and quality of scripts. So I prefer Bluechip mutual funds and I invest through SIP route.

Author: sasikanth09 Jun 2016 Member Level: Silver Points : 0

This is really a good article for new investors in share market. There is much information need how to choose a share which will give a good returns. How to choose a good share for future.

Author: Swagatika Pattanaik13 Jul 2016 Member Level: Gold Points : 5

First of all I would like to thank the author for this nice and inspiring article. As we always hear that stock market is a money losing place, whatever we invest vanish and becomes loss. But this is not the real truth.

I want to add some points for this article to give some more idea and suggestion to readers.
If you are a new investor, first of all do lot of hard work to learn what is stock market. If you are having doubts then post your queries on traders forum and get answer.

Golden rule to make profit from Forex trading is-
1- Knowledge
2- Margin money
3- Money management.

Knowledge can be gained from learning and either demo trading or real trading, because you need experience also to understand the market behavior.
Margin money is your investment amount. As Money makes money so never think that your small investment will become multiple.
Money management is the most important thing which one can only learn from various experiences like how much should you invest initially, how much stock you should buy in your portfolio, when to average the price, when to use stop loss, where to book profit and after what profit level should you withdraw some part of profit. All these things help you to make consistent profit from share market.

Author: Venkiteswaran27 May 2017 Member Level: Gold Points : 2

The article gives some useful tips for the uninitiated in stock market investment especially those given under sub heading 'My learning from Stock market investment'.

I just want to add one very crucial point:
We get to hear only success stories, but failure stories are never exposed. So please be cautious that for every success story, there are hundreds of actual stories of failure and disappointment.

Author: Umesh01 Jun 2017 Member Level: Diamond Points : 6

A good case history presented by the author and nicely explained some basics of share market investing.

It is said and is very correct that share market investing is not a cup of tea for every one. It requires a good study of the companies and thorough understanding of market movements. The market behaves in strange ways and one has to be patient. You cannot rely on one good share. You have to prepare a basket of good companies shares and monitor them. In the long run, the share market generally moves in a upward direction. In short run it can go up or down depending upon day to day news about companies, govt policies, rain forecast, global situations etc. The short term variations are basically useful for brokers and day traders who can pick up the share and sell it for a small profit or quit by paying a small penalty.

For the general investor it is not like that. He has to wait for significant time to reap the real benefits. So share market investment is full of risk but gives good returns if done with knowledge and patience.

Author: Natarajan03 Feb 2018 Member Level: Gold Points : 8

A practical article about Share Investments. I like the concept of SIP investment because one has to be really lucky to time the market or in simple terms to buy a share at a very low price and hold it for some time while it keeps shooting up.

For instance, take Godawari Power. On 1st Jan 2017, it was around 59 rupees but on 1st Jan 2018 it was Rs 361 and went up to Rs 615 before falling down to 489 on 2nd Feb. If someone had bought it on 1st Jan 2017 and sold it on 29th Jan 2018, they would have made a huge profit. If someone had bought the share on 29th Jan, a few days back, they would be suffering a big loss.

So, in such cases, SIP method helps because you can average your price as the value goes up or comes down wherein the profit and loss are not huge but manageable.

I have tried the idea of a 'Ghost portfolio' on money control or other sites. What I found is, because you have real shares and numbers moving up and down on real time, it helped me to develop a discipline in checking the stock and company performance, quarterly results, factors impacting the health of the company etc which needs to be done at a regular basis. It helped me follow companies that are good fundamentally but, due to other sentiments, are driving the price down.

Last but not the least, share investments are not like FD investments that you can start and forget. You have to work hard to follow your money so that it earns and does not suffer a loss, which would be inevitable by the law of averages.

Author: Jayesh Pawar19 Oct 2023 Member Level: Bronze Points : 4

Nice article.

Few Points from my side:
1) Do your own analysis, learn and you will earn.
2) You don't need full economical studies but you must get to know about essential economical terms.
3) Focus on investing rather than trading.
4) Give time to overall analysis of a stock like your own business, it reduces risks.
5) Don't deploy your entire capital on single stock, diversify it.
6) Possibly try to invest in a stock in tranches rather than bulk buy. Both downward and upward averaging.
7) Periodically review the performance of stocks that you have invested, this will ensure that whether your investment is in the right direction or not.

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My experience with Share Market and investments

How I have started to invest in Share Market

My learning from Stock market investment

Conclusion

Comments

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