The share market is a volatile market that’s ever-changing. It can help you make a lot of money, and at the same time, you can lose all your money. That’s why it is important that as an investor or a beginner looking to start share market investing to know the nitty-gritty of the market.
Share market investment is a great way to beat inflation and the best part, it gives investors a good return as well. In this competitive world, making money isn’t that easy as it seems. Today, you have to spend money to make money and there is no other way around. Investing in the share market seems like a viable option.
If you have already started investing in the share market, you will be highly benefited if you consider the Today Share Market Tips. However, if you are new to the market and want to learn the basics of how to trade shares and stocks, you may have a lot of questions going into your mind.
That’s why we have created this post to help you understand the share market. Our experts have tried to answer the most common questions asked by beginner investors looking to invest in shares.
1. What does the SEBI do?
SEBI or the Securities and Exchange Board of India regulate the securities market in India. For smooth trading, the investment market needs to be regulated by guidelines and rules. This is where SEBI comes into the paly. The organization ensures the smooth functioning of the share market and predicts the interests of the issuers, investors, and mediators like stockbrokers. SEBI keeps an eye on the fraudulent activities and malpractices and prevents them from happening through its statutory regulations, including the self-regulation of business. SEBI has framed a code of conduct that has to be followed by underwriters, brokers, and bankers, among other entities. Moreover, SEBI approves the regulations of stock exchanges in India and also amends them. The organization prohibits insider trading by regularly keeping an eye on price rigging. It is also responsible for inspecting the books of accounts of stock exchanges and financial intermediaries while educating investors on how to assess and acquire cost-effective securities. Experienced and professional investment advisers in India are SEBI registered.
2. Picking the right stock for my portfolio – what to consider?
There are numerous options available when it comes to stocks and shares. This makes picking the right one for your portfolio a challenging task. Our expert investment advisers suggest that the basic rule while purchasing share/stock is to keep your financial goals in mind. That is, some investors are looking for dividend income while others are looking for growth. You need to look into the company’s cash flow statement, income statement, debt figures, balance sheet, and management’s future plans, among other aspects. You need to analyze these data to create a foolproof investment plan. If the ‘earnings per share’ (ESP) is good, it means the organization is making a profit on a per-share basis. Moreover, you can make investments based on criteria like sector or industry, whatever you like. Experts advise that you should avoid investing in small-cap companies and look into medium to large-cap organizations. As a beginner, it would be wise if you consult your investment plan with an experienced investment adviser.
3. Can I invest if I don’t have enough money?
When you are investing small amounts of money, you are faced with several challenges. However, the good news is these challenges can be easily conquered. One of the biggest challenges of investing in the share market is that most of the investments require a minimum. Another challenge that comes with investing small amounts is it is hard to diversify small investments. Diversification is the key to share market success. Diversification allows you to spread your money around different sectors and industries. So, with less money, it will be difficult for you to spread it. But the solution to these challenges is to invest in ETFs (exchange-traded funds), mutual funds, and stock index funds. With mutual funds, you have the option to choose your monthly premiums based on your income and requirements. They can be much lower. ETFs, on the other hand, can be purchased for a lower share price as well.
4. Is the share market a good investment for beginners?
Everyone, including newbies, should invest in the share market. But as a beginner, you need to understand that investing is a long-term game and therefore, you should at least give five years to your investment. Shorter investments will not give you profits or help you achieve your financial goals. In short, you shouldn’t invest in the share market if you need money in the short-term.
If you have made up your mind about investing in the share market, then you should get professional help to make things easy for you.