Women in the stock market are no longer rare: Here is the beginners guide to the share market for you to start share trading!

Before I started writing this b eginners guide to the share market , I chatted with a few friends from different professional backgrounds — chartered accountant, journalist, home maker, IT professional and an entrepreneur — about their investment philosophy. It only reaffirmed my belief that many investors and especially women, are apprehensive about adding stocks to their portfolio.

There are two main reasons for this: The aim of this story is to orient you with the stock market basics and help you take that first baby step into the market.

I bought shares of Hindustan Unilever in August at Rs. I did two things right here. One, I bought at the right time, when the consumer story was just evolving in India, and two, held it for a long time frame. I also accumulated 4 rounds of dividend from the company.

Do not let that cloud your judgment. There could be many reasons why they lost money — bad timing of sale, wrong stocks picked or panic sale. However, you can decide how much risk you are willing to take by having a clear vision before you invest in the market — on your investment philosophy short-term or long-term and your capability to withstand sharp crashes and dips. Getting started with a trading account. The first and essential step is to get yourself a trading account Some examples: Most banks and stock broking companies offer this facility, so you could get more information from the bank you hold your account with.

Understand your risk profile. How much risk you are willing to take depends on you. Age plays an important role in determining the risk taking capability — typically, those with longer working years ahead can invest a substantial portion of their savings in equities.

By doing this, you can ride out any volatility in equity markets and give your investments the opportunity to earn positive returns. A 35 year old might be willing to take more risks than someone who is It depends on personal circumstances as well as the stock picking skills one has acquired. These tips will help you develop a strategy right for your needs. Identifying the right price. The return on your stock depends on the fundamental business management of the company and the price at which you buy.

Buying a good stock at a bad price defeats the purpose. What is a bad price? An indicator for this would be the price earnings ratio current market price divided by the earnings per share or EPS.

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PE tells you how much you are paying for each rupee of earnings due to the growth prospects. If the PE of the stock is more than its industry average or what the benchmark index is trading at, then you need to think twice before buying it.

Look at market capitalisation.

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Get a fix on the size of the company you are looking at based on the market capitalisation number of shares outstanding multiplied by the market price of each share. You can get more information on the market capitalisation of various companies at CRISIL or India Stock News. If you are in your 20s tolerance to risk can be high , with capital appreciation as the primary goal, you can look at small-cap market cap of less than Rs. Those in the 30s to 50s medium risk tolerance can have a mix of both mid-caps and large caps with more weightage given to large market capitalisation market capitalisation of more than Rs 5, crore.

Investors above 50 years of age low tolerance to risk look for capital preservation. Stable companies, especially those with large market capitalisation, good fundamentals and positive cash flows, are ideal for such investors.

Sectoral leaders are preferable. Consider stocks with a consistent dividend paying track record as it provides regular cash flow during retirement.

Defensive stocks, from sectors such as FMCG, pharmaceuticals, are suitable for investors with less or negligible risk appetite. Build your portfolio gradually.

Ensure that the stock has reasonable trading volumes. Watch out for companies that make reasonable disclosures, have operating profit margins, generate constant cash flow and have a return on equity of above 10 per cent. Avoid companies with low floating stock or high management stake. More importantly, buy a stock only if you understand its business.

Once the stocks and sectors have been identified, a staggered approach to building the portfolio is best. Investing in a phased manner, over a month period, will help you gain confidence. Remember to build a well-diversified portfolio, and have a reasonable number of stocks, say 10, in it. Fix your time frame. A very important criterion for equity investment is to understand the time frame of investment. If you are a long term investor, then do not lock in your short term funds.

If you are a short term investor, your risk level is higher. Investors with medium to long term horizon definitely more than one year should have sound reasons for investing in the company. This should happen, preferably, once a month.

The markets are very dynamic and with many changes happening at both the micro and macro level, it is important for a do-it-yourself investor to remain alert and reshuffle the portfolio, if needed. Follow the quarterly results and read up regularly on the company and the industry you are invested in.

Research every stock you plan to buy and avoid buying simply because someone else is doing so. Women's Web is a vibrant community for Indian women, an authentic space for us to be ourselves and talk about all things that matter to us. Follow us via the Facebook or Twitter. Become a registered user , and you'll be eligible for our free ebooks plus never miss our newsletter or event notifications.

Not Internet Connection now , and I have Indian Rs. My typing speed 25 word P.

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And I Know 1. And related Computer Basic all. With kindest regards, Dipak Kumar Adhikari Tegharia Dhali Para ,NandanKanan. Your stock buying strategy is must be unique.. By following Above mentioned five tips you can improve your strategy.. Thanks for the valuable Post. It is very informative about stock investing for beginners. Choosing the right indicator or analyzing software blended with human aspect gives better results.

Thanks for sharing such needful information, Its to good for share trading beginners, keep updating more about share trading. Our goal is to help women learn and grow! Want to get more freelance writing opportunities?

By Poornima Kavlekar Before I started writing this b eginners guide to the share market , I chatted with a few friends from different professional backgrounds — chartered accountant, journalist, home maker, IT professional and an entrepreneur — about their investment philosophy.

These have been mentioned simply as examples and in order to provide more information to the reader. Women's Web Women's Web is a vibrant community for Indian women, an authentic space for us to be ourselves and talk about all things that matter to us. Latest posts by Women's Web [ View all ].

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