A post for those new to investing in stock market.

Investing in share market is a very simple matter. What are the basics? By investing in shares of a company you become a shareholder. You also have a share in the profits and losses of the company.


Account Opening

First you need to open a demat account. That means you can buy, hold and sell stocks. Account should be opened with a broker approved by Government of India. In today’s digital world you can easily start an account from where you were. Stock Picking Investing in companies requires you to know the company well. It is not a difficult thing now a days.



All these details are easily available on the website. According to the current stock
market situation, it is best for new investors to choose stocks of good
companies and invest in them through monthly SIP.


How to choose good stocks?


This requires examining two important fundamentals. Fundamental analysis. Technical Analysis. What! If you ask what is the basis of this, you will say words that you don’t understand!! Let me make it simple. Fundamental analysis. Examining a company’s accounts including inventory, purchases, wages, income, expenses, debt, asset value, profit, loss, tax, quarterly and annual results, and more.

Fundamental Analysis.(At least last five years of data should be analysed) To know more about this there is a post on Fundamental analysis-topic in Tamil. Technical
Analysis. What is the price of this stock as per the current stock market?


Will the price go up or down in the future with lots of data? It helps to predict that. For
example, the price of the things we use in our daily life fluctuates. In
particular, the price of onion reached its peak about three to four months ago.


The reason for that was that the demand was high and the supply was very low. In that situation, onion would have been used in a small amount in many houses and hotels. Then the price of onion came down.


This is how a company’s stock is priced sometimes. Technical analysis is used to detect the excess and sometimes the low.

You can invest
in stocks of top three companies that are doing well in those sectors. There
are some good stocks to choose which offer high dividend. It is important to
know the news of the company you have invested in at least once a month.