How Beginners Can Start Investing in Indian Stock Market in 2019? (Basics)

Investing in Indian Stock Market

When it comes to investing, the first most important crucial questions that most beginners ask is

What is the minimum amount of money required to start Investing in the Indian Stock Market ?

  • No Minimum amount required. You can even invest in just one stock with price Rs. 100
  • Anything between Rs. 1000 to Rs. 5000 is good to start.

The best thing here is that the smaller the amount the better it is for you I mean the risk of losing money is highest for the bigness they do not know where to invest, what stocks can be profitable or which is a good industry and that’s why they can lose a lot of money. If they start investing heavily in their initial days so my suggestion would be to start small.

Where You Should Open Your Brokerage Account ?

You cannot go directly to a Bombay Stock Exchange and National Stock Exchange and give money there and buy stocks. You have to use different stockbrokers to buy stocks for you. The stockbrokers have made the life of all the people a lot easier. Just by a single click, you can buy stocks. There are a lot of options are available in the Indian stock market. Few of the major stock brokers in India are ICICI direct, HDFC securities, Kotak securities, Angel Broking, ZERODHA, etc.

Now in India there are two kinds of Stock Brokers

  • Full-service brokers (Traditional banks or big brokers)-EX ICICI Direct, SBI smart, HDFC securities

These brokers along with the trading facility they also provide you advisory services. Let’s say you do not have much information about the Indian stock market and you do not know where to invest so these brokers will also provide you advisory services and along with advisory these full-service brokers also provide you other facilities to invest in different investment options like mutual funds, IPOs, FDS, currencies, Forex etc.

  • Discount Brokers (Budget Brokers) -EX ZERODHA, 5 Paisa, etc
  • Discount Brokers like Zerodha can save you a lot of Brokerages !!

If you are a beginner Zerodha is a good alternative for you and anyhow do not spend so much. I have seen many people who spend like 3-5 months just to find out the right broker for their money and they just procrastinate and instead of procrastinating for finding a good broker if you have used that 4-5 months to learn and to research stock it can be more profitable for you. Now using Zerodhaor most of the discount brokers right now you can open your account within an hour. I mean when I started trading it generally took around 5-7 days to send all your documents and to open trading and Demat account but right now everything is paperless. Just have to upload your documents i.e. an Aadhar card, bank card, and bank passbook online on these portal and you can start reading within an hour.

Where to Invest ?

  • For Beginners, Large Cap Companies are good options to start investing.

Large companies are easily visible. The product & services of those companies you already know or you can easily find their products and services and similarly all the financial information or the information about their management, their CEO’s, who are the promoters all these information are easily available for the large cap companies but when it comes to small and mid-cap companies these companies are not that easily visible. Means if you want to read about the balance sheet or about who is running the company, what are the credentials of the managers or the CEO of the company it might take you a lot of time. Most of the other experience people they know about different websites which we can refer to get all this information but for the beginners, it can be a little difficult. So my suggestion will be to go for a large cap company, blue chip Company which is easily visible and whose product services, management, competitive analysis, and all the details you can easily find on simple Google search. Let’s say HDFC bank, you can easily get all the necessary information about them online. So the third step is where you should invest I would suggest you to start with the large cap company of blue chip company which is easily visible and whose products and services you already know and the thing is that most of the companies from Shoes to petrol firms to banks to hair Oilto Shampoo, everything has a company behind them and you already know those companies. Just research about them and find whether it can be a good investment opportunity for you. you.

Once you have understood the basic let me give you few more advice’s.

Tip 1: Invest in your education

I see a lot of people who invest lakhs of money in college education or giving semester fee but when it comes to doing courses on personal education or financial education or even self-development most people are not ready to invest but the thing is that if you do not invest, you won’t get any returns and it is very important to invest in your education. My suggestion would be to buy some good books on investing like

  • Intelligent Investor by Benjamin Graham
  • One upon Wall Street by Peter Lynch
  • Value Investing and behavioral finance by Parag Parikh
  • Common Stocks and Uncommon Profits by Philip Fisher
  • Enroll in Online Stock Market Courses to get better

Tip 2: Continuously increase your investment amount

  • Start with Rs. 1,000 to 5,000.
  • Increase your Investment amount with time and experience.
  • Focus on building long term wealth, not small short term profits.

So these are the simple steps of beginners start investing in the Indian stock market. You do not need a big amount to start investing in the Indian stock market. Similarly opening a dividend trading account is not a big deal within one or two hours. You can also open your trading and Demat account if all your documents are ready and third is researching stocks is also not difficult if you start with large cap companies. The information about most of these big companies you might already know. So these are the 3 simple steps in which you can start investing in the Indian stock market and if you have any questions regarding how to start investing in Indian stock market just comment below and I will answer that.

10 thoughts on “How Beginners Can Start Investing in Indian Stock Market in 2019? (Basics)”

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  2. Kalyan Bhattacharya

    Dear Sir,
    You have given excellent advice for the beginners . If some one interested of learning stock market must follow this way.

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