How To Invest Rs. 1,000 In Share Market?

In many studies, it has been found that only a very nominal percentage of the Indian population invest in the stock market. Earlier, the figure was less than 2%; but in 2020, it rose to around 3.7%. However, in China, this percentage is around 12%; while in the U.S., 55% of the population either own stocks directly or through mutual funds.

With the advent of technology in the stock market, millennials have been interested in exploring the markets in recent times. So, if you want to invest in the stock market but do not know where to start, here is a brief guide for you.

Start by learning the basics:

The first step to investing in the stock market is learning how the market works. You don’t need to learn technical analysis, strategies, or charts initially. The basics of stocks, how price movement happens, basic demand-supply is what you need to understand. You can start by reading different books on investment and the stock market to gain knowledge.

• Tip: Stay updated about the industry. Read the latest news on why the markets are performing the way they are. This will help you understand the actual reason behind the price movements of the stocks.

One stock for all of Rs. 1000:

When you are investing for the first time, you need to first learn how the market works instead of worrying about profits right from the word go. So, if you start buying multiple stocks with Rs. 1000 in the beginning, you might not be able to track them efficiently. Moreover, since you are starting with a small kitty of only Rs 1,000, you will have access to only a limited number of stocks to invest in.

• Tip: Start with 1 or 2 stocks only after doing your complete research about the management and the company’s fundamentals. Once you profit from the same, you can opt for a diversified portfolio by booking your profits.

Choose stocks that you know:

The simplest way to pick up stocks for a beginner is to opt for stocks of companies whose products you use regularly.

For example, the toothpaste you use, the cooking oil, the petrol company, the shampoo, the computer company, etc., could be your first choice.

You can choose this stock as you know the basics of the company, as in what it does, its products and prices. It will be interesting to research a product that you use in daily life.

• Tip: If you are still confused about where to start, opt for a blue chip stock and then proceed with the rest of your investments.

How to start your investing journey?

Being a beginner, you must understand how the market works before plunging deep into it. For that, you need to do your research, keep investing through a trustworthy broker, trust an expert professional, and most importantly be patient. You cannot learn everything on day 1. The longer you stay in the industry and the higher your hunger for knowledge, the more you can learn. Remember never to follow the herd mentality but do your fundamental research before opting for your stock. Once you are comfortable, you can start with technical research as well.

Wrapping up…

So, what are you waiting for? Open your Demat account, and start your investing journey at the earliest. Remember - It is just the beginning. You can set monthly investment targets of a certain amount. This will help you save your money and accumulate wealth over time.