My experience with Share Market and investments

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.

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.

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.

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.

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.

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.