Stock Market Fundamentals for Investing in India

Introduction:

Before we start the one should understand why do you want to invest in stock markets.

1. inflation: Inflation is a definite hurdle when it comes to wealth creation and hence, choosing avenues that beat inflation is the only way to grow rich in the long run. If your returns are not higher than the inflation rate, effectively your returns from investment become minimal, zero, or maybe negative, and stock investments can fetch you high returns over a long period.

2. Power of compounding: When it comes to investing and understanding how wealth multiplies, the concept of compounding has a huge role to play. If you let your investments stay for a long time and let the interests compound, you will reap good results and will get one of the best benefits of investing in stocks. This is one of the main reasons why you should consider investing now if you have not done it yet.

3. simple and flexible: Investing in the share market is not complex. All you need is a disciplined approach to investing for the longer term and a little bit of research about the businesses you want to invest in. You can do it yourself or take the help of a broker. All you need is a trading and Demat account. Similarly, as share market investments do not have any lock-in period, you can buy and sell shares at any time whenever desired. The amount that you invest can be as low as Rs. 100.

TOP TOOLS TO SET UP

1. news

The first thing that you need to when you set up is tracking the news.

Below are the main news websites which you can follow to keep updated with the market.

moneycontrol is a website which I like a lot, the reason being it gives you so much information in one area and all the latest news is updated here first. Similarly, you can look at livemint, Economic Times, Bussiness Standard, Financial Express these are the five generic finance news websites that everyone should track. There is one more website called finshots which talks about the financial news itself but in a slightly different manner, it is like a different take on your analysis.

2. Demat account:

where to open the Demat account? there are a lot of Demat account providers. you can probably use Zerodha as they charge less brokerage. If you want to invest in foreign stocks you can create an account in groww app. you can check this website to compare the broker plans.

research tools:

1. smallcase: smallcase is a basket of stocks that reflects an idea that is simple to understand it is created by experts. These are portfolios of stocks or ETFs, weighted intelligently to track a theme, strategy, or objective.

2. trendlyne: It is a platform for stock market analysis, research reports, stock alerts, visualization tools, and trending business news. It has a cool feature where you can find the list of top superstar investors and their portfolios.

3. screener: It will help you focus on the stocks that meet your standards and suit your strategy, screeners are effective filters when you have a specific idea of the kinds of companies in which you are looking to invest. A stock screener limits exposure to only those stocks that meet your unique parameters.

4. valueresearchonline: tool useful for doing fundamental analysis for any stock. It provides a lot of data about the stock fundamentals, quarterly reports, key ratios, etc, for analysis.

emotions in the stock market

One principle here is when you are investing in the stock market do not get scared it is not a place for people to get scared if get scared you panic then you lose, you cannot be emotional when it comes to the stock market you should understand this before you open a Demat account, you should be very logical and need to find out what companies are good and bad.

I say this because, for example, say I find a company that is very good as it has great future prospects and I invested in it today and straight away it fell by 15% because of some reason but not because the company's fundamentals are bad, what would you do in that situation at that situation, you would be like should I sell it, what if it goes down from 15% to 20% and I lose 5 more percent because of fear and sell it off and once you sold it goes up and one year later you see the same stock it was 2 times what it was last year and would regret your decision selling it.

So was that 3-4 days of panic so necessary that in the long picture of 2 years you would have made much more money if you have had some patience. This the biggest learning that I have learned from stock markets

You should change your psychology when the market goes down it does not mean you are in a bad state. In fact be happy if the market goes down see it as an opportunity to invest more in the stock that you love and fundamentally good, markets are going to go up eventually do take attention to the short term. You should focus on the long-term wealth creation, not the short-term quick money stuff like that.