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How To Learn About Stock Markets?

Discussion in 'Money Matters' started by Anusha2917, Feb 1, 2021.

  1. Anusha2917

    Anusha2917 IL Hall of Fame

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    I know nothing about this topic.. On a scale of 10 my knowledge on this topic is a negative value. But I want to learn.
    How and where to start?
    Any courses which would help me? Online links which would help me gain basic knowledge about it.

    If it's been discussed earlier here in IL can someone tag me in that post or post a link here.

    Looking for some useful interaction in this thread regarding stock market, trading etc.
     
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  2. AppuMom

    AppuMom Gold IL'ite

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    There are some good YouTube channels for beginners on stock matket.Browse and you can start from there
     
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  3. SunPa

    SunPa Platinum IL'ite

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    @Anusha2917 , joining to hear the words of wisdom from other Ilites

    I do a little bit locally , but kind of blundered my way in. So I need pointers and the right way to go about it .

    May I also add on to OP's queryvand ask how can one invest in India market , if one is not an Indian citizen , the implications?
     
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  4. Laks09

    Laks09 Staff Member Finest Post Winner

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    Writing down all your assets and liabilities is a good way to start. If you don't know much about anything investments, then the first thing to do will be to take a look at what your income and outflow is. Is there a better way to tweak it? Once you have a good idea of your savings, spending, short term, medium term and long term goals, its a good idea to sit and discuss your positions with a paid professional to get some ideas on where/how etc. Investments have to be diversified(real estate, FDs, PPF's, post office funds, MFs, stocks etc). We never make big investment decisions ourselves. Over the years, interacting with our financial consultant has given me a good idea of managing our portfolio and balancing it out. I keep a little cash on hand to dabble in some investments just for my own satisfaction. It's an amount that I won't regret losing. I haven't taken the next step, that is, making investment decisions on my own. Our financial consultant has always been available for us. If he ever closes shop, I will truly know how much I actually understand about the market.

    I did read a lot online on investopedia and the like, took lessons from the financial advisor(he's a very dear friend as well) and it helped me A LOT in the initial years. Now, I don't have the time to research shares/positions etc. I just go by what the FA says.
     
    Last edited: Feb 1, 2021
  5. Laks09

    Laks09 Staff Member Finest Post Winner

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    Which country are you a citizen of? You can invest in India using any of the brokerage firms but you need to look into the tax implications in your country. US cits have to file taxes for foreign earnings and there is an implication while buying MFs in India(It's been a while and I forget the details but a good FA should be able to help). You also need a PAN card et al to invest in India. You will of course have to file in India too. We figured it out when we moved back and started working in India. Filing taxes in both countries isn't fun. We have to use a tax consultant in both countries(cant use turbo tax anymore) to file everything properly
     
  6. hrastro

    hrastro Finest Post Winner

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    Congratulations! You have started on a financial journey.
    I don't know anything about you except that you sound young - So I'll act as if you're a fresher in this. And I'm assuming you're in India. Although the basic concepts are the same everywhere.

    1) Do you have a Demat account?
    To buy and hold shares - it can only be in an electronic format, you need a Demat account. Most private banks like ICICI and HDFC and others will easily open an account for you - you just need your address proof and PAN. Else, you can open with zerodha or sharekhan or Kotak etc

    2) Understand how mutual funds work - and what is an SIP in mutual funds ! For Mutual funds, you dont need a broker - you can buy direct - it is cheaper than using the demat account and gives higher returns ! But you need to save the details in some excel or save the statements safely.
    You can check and understand some terms - entry load, exit load, annualized returns, 3 year return, benchmark, etc
    You can also check some terms like - Equity, Debt, Liquid Funds, ETF Funds, Large Cap, Mid Cap, Small Cap and Multi Cap
    Some more: SIP, SWP, SEP, IPO, NFO, fund manager, fund house, risk vs return vs age, Crisil rating, Fund Category, Asset Allocation, Long Term, Short Term
    Check valueresearchonline or yahoo finance or moneycontrol or icicidirect - they all have tutorials for the beginners.

    3) Once you understand these :
    I think you are young, you can start slowly now. Understand the "Power of Compounding" - small amounts, start early, consistent over many years will give you a great retirement package.
    You can take up equity - keep the risk low and start with mutual funds SIP - see where the fund manager is investing. Track the portfolio using some excel and some tools on moneycontrol or yahoo finance or your demat account

    Assign an amount every month - setup an automated payment through your bank for it, so that it is done automatically.

    4) Currently market is very high... Better to let the experts make decisions. Dont buy individual shares. Mutual fund SIP in Bluechip large cap is the safest currently. Even some balanced funds may be good. As the market is high, and interest rates are at all time low, Debt funds will also be safe currently.
    Check for funds that are showing consistent above average returns for past at least 10 years. And have 5 star crisil rating. Also google and see if the same fund manager is managing or he has been changed. You can use these terms in advanced searches of valueresearchonline or moneycontrol.
    Also, since you are going for a long term (I assume you're not going to need the money in the next 3-5 years) - select the Growth Option (NOT Dividend payout or Dividend Reinvestment)

    5) When the market goes low, try to buy some Bluechip Large Cap stocks - Again, use SEP. dont get locked in with large amounts and lose your money without proper research. So here you need to open the Demat Account.

    6) When you open a Demat account, every bank or Broker will start selling Life insurance or some ULIP or some savings plan or tax escape plans etc... Always remember - they are getting the entire amount of your first premium and % from the rest - so ignore! Dont get fooled into combining insurance with investment.
    Take a term insurance on the "providers" life if your husband is the provider. Take some health insurance.
    Google and check why this statement is true - "Do NOT mix Insurance and Investment. Insurance is NOT investment"

    7) After all the research and homework done, keep a track, learn how to recognise good funds and good stocks. Remember that stock market is a risky proposition. But you're young, India's economy is growing, the risk is currently much lesser than the returns.

    8) Financial Goals - check some good 360 degree financial health format and do a complete analysis of yourself and check how much you need in the future.

    Create an excel - Preferably not online - you know how google, facebook and whatsapp are stealing data
    What you have, what you need, what you want :
    Assets - Flat, Plot, House, Farm
    Insurance - Life, Health, Loan/Accident etc
    Buy a Farmland
    Kids' education
    Kids' wedding
    World Tour Plan
    Retirement Plan
    Monthly Income during retirement

    9) One of my friends' young cousin spoke to me before she got married - I gave her and her fiance lot of such gyaan over several days. 10 years later, now she says she has much lesser debt than her peers, home loan almost paid off and they both take off for a month once a year to travel and trek around the world.

    10) Any questions, do post back.

    All the best
    Keep Smiling
    HR
     
    Last edited: Feb 1, 2021
  7. Laks09

    Laks09 Staff Member Finest Post Winner

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    @SunPa - Forgot to add above, there will be a taxable limit for foreign income(at least there is in India). It's a good idea to keep foreign earnings below that number. You will still have to file though.
    All of the above is based on my minuscule US tax law understanding. Verify with a pro.
     
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  8. EverydayBloom

    EverydayBloom Gold IL'ite

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    Dear OP,

    TD Ameritrade Education is s great place to start reading about Personal finance, Investing, stocks, options and so on. If you want to try your hands, you can even do paper trading before putting your own money, this way you can gain some experience without "actually" loosing money. And this book shared by @Rihana is the best book that go over basics in very simple language. This is one more best book I started with learning many things from saving to retirement to investing. Investopedia is one more great place to read about finances/investing/available options and so on. If you are comfortable, go ahead and open a brokerage account with Fidelity/Vanguard/TDAmeritrade/M1finance(no Options trading)/Robihood/Webull all these firms supports individual stocks, ETFs, mutual funds, index funds and so on. Always do your research before putting money in any company, read their stock charts, how they are performing for the past 1yr or so. Thumb rule is NEVER panic when market is going down. You never see stock market charts in straight line!!

    Happy Investing..
     
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  9. Laks09

    Laks09 Staff Member Finest Post Winner

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    @hrastro - What is a good site in India(like investopedia) to learn about personal finances? I've never found that one go to place for India based asset planning.
     
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  10. hrastro

    hrastro Finest Post Winner

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    @Laks09
    I haven't seen investopedia .. but moneycontrol is the best one.
    Valueresearchonline also gives good info especially for the CRISIL ratings for mutual funds.
    Each fund house and broker - HDFC, ICICI, Sharekhan etc have their own tutorials too.

    I would read all and then decide.

    Moreover - if you keep all your funds with the broker, the broker account itself gives you a lot of graphs and analysis of your portfolio.

    Have been doing this for the past 20+ years, and still the past 2-3 weeks due to the markets reaching the peaks, I spent hours poring over research, articles, analysis, talked to like-minded friends over the strategy, called up so many AMCs etc...

    It is not an easy task, @Anusha2917 . You need to select only stocks with good fundamentals, stay invested, not get worried about chota-mota dips and crests, track, track, track, buy when low, lower the cost average, keep tracking, sell when high and ride the waves!
     
    Last edited: Feb 1, 2021
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