🤑 Stock investing for a baby- 1 min
Everyone has heard of how the “share bazar” is a gamble, that trying to make money off of stocks is purely luck. They’re partly wrong and I’ll tell you why. Very broadly, when people refer to the stock market they’re either referring to Investing or Trading in Equities. Trading is like a sport, it requires a good amount of training and talent. Some are good at it, most fail at it. Not everyone is meant to run at the Olympics and here’s where most people lose their money. Where we’re going to make our money is Investing. Simply put, a trader holds and sells stocks during market hours i.e between 9:15am and 3:30pm whereas an investor holds the stock usually for more than one market day.
The asset in question which is traded upon is a financial instrument - the most common of which is equity stocks. An equity stock represents a portion of a company. Imagine a company’s ownership as a cube with equity stock being its building block. As an investor, you own a portion of a company. Starting to invest in the market is easy. All you need is a savings account, a trading account, a demat account and some capital. Your savings account is held with your bank. The trading account is held with your broker (like Zerodha, Groww, Sharekhan, etc). The demat account is held with either CDSL or NDSL which are government agencies for holding dematerialised share certificates for BSE & NSE. With these accounts and some capital you’re more than good to go.
All you need to do now is pick your stock, which in and of itself is a skill you’ll learn and fine-tune over the years. While stock picking, an investor evaluates the “fundamentals” and “technicals” of the company. It’s going to be a long run learning how to invest.
[ Originally written for The Kalabhavan Express, also featured on my personal blog here ]
Note: Please make your own judgements and do your own research while investing your money.