If you are planning to quit your regular job, or are a stay at home mom, looking for an extra income, then trading in stocks and shares is definitely an opportunity for a good work from home option worth considering.
The stock market does not require you to make huge investments, or expenditure on setting up an office, or wasting time and money on commuting. Technology has made it possible to enter this financial world , where all you need is a computer and an internet connection, to work from anywhere in the world and keep a tab on your money.
Requirements for Share Trading
As far as the physical requirements go, all you need is a computer, a telephone and an internet connection.
A tie-up with a reputed brokerage firm or an online trading account will get you started.
The internet also provides you with real time data regarding different shares prices or scrip (as they are known in financial world).
It is best to start small and increase the investment as the going gets better. The amount of investment would depend on your investment strategy. An amount of Rs 10,000 can be good capital to start with if you make the right picks.
However, physical requirements alone are not enough. The share market has its ups and real big ones for that however, to save yourself from the downs (the very deep ones) you need to be equipped with certain basic skills too.
It is important to have a good understanding of the functioning of the market before you make an entry. You do not need to be a financial wiz to start trading in shares, however, knowledge regarding the market, current price of scrips, and research regarding the history and credentials of the company, where you wish to make investment is essential.
The share market is no get rich quick scheme; it requires a combination of several factors to be a winner here. Patience, knowledge and understanding to predict the market is the only way to stay above it.
Start With a Virtual Game to Get the Feel of the Market
While in college and studying business and finance there was a game that the professor had introduced us to. This is a virtual game which is played purely with a paper and pen (there is no real money spent or earned). Here is how you play it:
-Start with a virtual capital of Rs 10,000/-.
– Go through the various scrips and decide where you would like to put your money. Make out your portfolio (list of shares invested in) on a piece of paper.
– Check the values of your chosen scrips every single day in the newspapers or online and you can decide as to when you would like to buy a new scrip or exit from an existing one. Remember you need to stay within your budget at any point of time.
– Play for a whole month buying and selling as per your predictions of the market. At the end of the month if you have made money, guess it is time to make a real beginning.
Day Trading versus Investment
Day trading (buying and selling shares during the same day) may seem to be a rather attractive way of making some quick money. However, it is not advisable for a beginner, as the risk of losing is much more than the gain.
Pick good valuable stocks and you will make money in the long run. Be patient and the rewards of success will be yours. Whether you decide to stick to the blue chips (the heavyweights of the market) or go with the midcap, or the small cap, will depend completely on your investment strategy. However, make sure not to put all your eggs into one basket.
The market is known to be ever-changing, extremely volatile and dynamic in nature. The ups and downs are a regular feature here so be prepared at all times.
If the volatility is not for you, then you may decide to stay with the mutual funds. You have an option of investing a lump sum or making a small payment (anywhere from Rs 500/- upwards) every month known as SIP (or the Systematic Investment Plan). Here too be sure to pick a good fund and then you can be sure that the fund managers will do a good job with your money.
Equipped with some good research, patience and an intelligent investment strategy, you will see that your investment may soon reap rich dividends. With experience and exposure you will have a better understanding of the market, and will soon realize that with less effort you are able to get more out of your investments.
The market is extremely volatile and thus, requires regular monitoring to keep track of the changes.
Keep your eyes and ears open to any and every information that comes your way. The business channels, the newspapers and the internet will all be able to provide the latest information, being current is important.
Information is power and equipped with it you can be sure of winning against the odds and emerging a winner.