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How to start investing in shares?

Preeti Jain
Ranch Hand

Joined: Jun 08, 2005
Posts: 57
Hi people,

I am 24 years old working professional and want to start investing in shares. However, I have no clue about where to start and what to do

Can anyone help??

Thanks!
Axel Janssen
Ranch Hand

Joined: Jan 08, 2001
Posts: 2164
Buy shares when they are cheap and sell them when they are expensive.
I have very little shares and I don't read special investor mags, but I am interested in economic topics in general. Currently its a lot more riskier to invest in shares than 3 years ago, when they were very cheap.
There are introductory books, but I know only german titles. If you are interested in economics, psychology and history its fun to read.
[ June 14, 2005: Message edited by: Axel Janssen ]
Nischal Tanna
Ranch Hand

Joined: Aug 19, 2003
Posts: 182
www.icicidirect.com is one of the best place to invest in shares.

To get started u will require a Demat Account with ICICI (assuming u already have an ICICI Savings account.)

So, in the above case it shud take 3-4 working days.

If u do not have a Savings Acc with ICICI it will take around 7-8 working days.

To know more, please post ur queries


Thnx
S.L.Narayanan
Ranch Hand

Joined: Apr 01, 2005
Posts: 431
Preeti

Before thinking about investing in shares, ask yourself the following questions.

(1). What is my level of knowledge in Stock Market?.
(2). What is my level of knowledge about a company whose shares I am going to buy?.
(3). Do I know the performance of that company for the past 5 years?.
(4). Is the sector in which that company is operating on is performing well in the current years?.
(5). Who are all the competitors of that company and what are all their strengths to overcome this company in the near future?.
(6). Am I going to invest for long-term or short-term?.
(7). Do the broker through whom I am planning to buy stocks is reliable?..
etc..etc...etc...

So by this time you should have got a clear idea of whether to invest in stock market or not. If u have enough knowledge then you can get into it. Otherwise please dont. Because it is very easy to make money in stock market as well as to loose also. So if u dont have enough knowledge better go for Mutual Funds where the experts will do the work for you.

To know much about mutual funds go to http://www.indiainfoline.com or http://www.economictimes.com.


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Preeti Jain
Ranch Hand

Joined: Jun 08, 2005
Posts: 57
Ummm I dont think I fare well with the questions you mentioned.

For the past few weeks I have been checking out a lot of mutual funds and came to a decision that SBI Magnum Tax Gain and HDFC Taxsaver will do good to me in terms of high returns and tax savings too!!

Then today I came accross an article that stated Provogue is out with its IPO so was wondering weather I should concider investing in shares directly..

Any comments??
S.L.Narayanan
Ranch Hand

Joined: Apr 01, 2005
Posts: 431
Better start investing in Mutual Funds and in the mean time collect informations about various companies, sectors and over all stock market. In Mutual Funds itself u can suggest them (SBI or whom ever it is) to invest ur money in a particular sector say IT or Pharmaceuticals etc... If u continue to do the same after a year or so u can start investing on Stocks directly...
Gerald Davis
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Joined: May 15, 2002
Posts: 872
If you have any type of debt,bank loans, HP creditcard , clear them before tkhinking about stocks and shares.

This is because the interest on loans will be higher then any interest gained by working the stock market. I know that a margage is a loan and I know that the same logic would apply, but see some peaple ,in the know, would disagreeing with me.
[ June 14, 2005: Message edited by: Gerald Davis ]
Matt Fielder
Ranch Hand

Joined: Oct 27, 2004
Posts: 158
I skipped everything until I saw Gerald's post.
Listen to him. Get out of debt first. I know its crazy, but do it. You think you're earning interest, but you're paying out the same amount in debt interest. Pay off debt and your money will work for you and not in a tug-o-war.

And DO NOT invest in individual stocks. Good growth stock mutual funds. Split them 4 ways ranging from conservative to aggressive. Whatever you do, DO NOT invest in individuals. If you have some play money that's completely extra, cool. The stock market can be fun. If you're investing for the future, don't do it. Does Enron ring a bell?
stara szkapa
Ranch Hand

Joined: Mar 27, 2003
Posts: 321
IT and stock market is the past. Real Estate is a bubble. What is the future for making money? How about Poker?
Preeti Jain
Ranch Hand

Joined: Jun 08, 2005
Posts: 57
Thanks guys for all the advice.. I think I will go for Mutual Funds for the moment.. I haven't got any debts by the way.. Haven't taken any loans and haven't got a credit card!!
Gerald Davis
Ranch Hand

Joined: May 15, 2002
Posts: 872
You have no mortgage, you rent? You have will be better of owning your own property. If you paid of the mortgage then there might be better alternatives ways to invest your money.
Preeti Jain
Ranch Hand

Joined: Jun 08, 2005
Posts: 57
Yeah I have rented a place because I dont stay in the same city for more than a few years so until I am married buying property doesn't appeal to me!
Matt Fielder
Ranch Hand

Joined: Oct 27, 2004
Posts: 158
Then in addition to funding mutual funds, start saving for a house. You want a healthy 20% downpayment with a 15 year fixed rate mortgage; no points, no origination.

When its time to buy a house, you'll be happy that you have the cash.
sunitha reghu
Ranch Hand

Joined: Dec 12, 2002
Posts: 937
All programmers are worrying how to invest money except me because I dont have any money
Lokesh Rai
Ranch Hand

Joined: Nov 10, 2004
Posts: 39
i've heard a lot about online-poker-ers-making millions..anyone have idea if that's possible?
Joe Ess
Bartender

Joined: Oct 29, 2001
Posts: 8927
    
    9

Originally posted by Lokesh Rai:
i've heard a lot about online-poker-ers-making millions..anyone have idea if that's possible?


Sure. . . If you own the casino.


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fred rosenberger
lowercase baba
Bartender

Joined: Oct 02, 2003
Posts: 11417
    
  16

I've heard a lot about online-poker-ers-making millions..anyone have idea if that's possible?

There's an old adage about gambling, that goes something like "The only way to make money at a Casino is to own it or work there". I'm sure there's some coralary/modification to that that would apply to any online gambling as well.

Might i reccomend Phil Gordon's book, "Poker - The Real Deal". There's a few chapters on what it's like to make your living playing poker, and it doesn't sound pleasant to me. And remember, for every person who makes a living playing poker, there have to be enough losers to cover that plus the house's rake. Statistically speaking, where do you think you're more likely to end up?


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stara szkapa
Ranch Hand

Joined: Mar 27, 2003
Posts: 321
Originally posted by fred rosenberger:

There's an old adage about gambling, that goes something like "The only way to make money at a Casino is to own it or work there". I'm sure there's some coralary/modification to that that would apply to any online gambling as well.



Good poker players are not gamblers. You shouldn't equate poker to other games such as roullete or black jack where you play against the house and the odds are against you. In poker you play against other players and the odds are not necessary against you if you know how to play.

And "how to play" includes finding less skillful opponents which is quite easy when you go to PartyPoker and there are 70.000 people playing. Most of this people are gamblers trying to have fun.
[ June 15, 2005: Message edited by: stara szkapa ]
Randall Twede
Ranch Hand

Joined: Oct 21, 2000
Posts: 4347
    
    2

without reading all the post, my advice is stick with what you know...which is probly computer related stocks. look at their past performance and read up about them in places like "computer user" if they still around or "wall street journal". try to catch them when they in a temporary low.

oh yeah...and dont put all your eggs in one basket
[ June 15, 2005: Message edited by: Randall Twede ]

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Randall Twede
Ranch Hand

Joined: Oct 21, 2000
Posts: 4347
    
    2

Preeti Jain,

im impressed you as smart as me...i have no credit cards either...never will.

credit cards are for fools is my opinion
stara szkapa
Ranch Hand

Joined: Mar 27, 2003
Posts: 321
Currently it is very difficult to make money in the stock market. This includes mutual funds. Sofisticated investors like options traders might make some money, but this is not the best time to get into it for a beginner.
Randall Twede
Ranch Hand

Joined: Oct 21, 2000
Posts: 4347
    
    2

mutual funds just means someone else(an "expert") is deciding which baskets to put your eggs in

here in oregon the best thing is probly investing in real estate...but then i so broke i cant afford a ham sandwich so you dont have to listen to me :roll:
[ June 15, 2005: Message edited by: Randall Twede ]
Randall Twede
Ranch Hand

Joined: Oct 21, 2000
Posts: 4347
    
    2

often the best company to invest in is the one you work at
Aj Mathia
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Joined: Apr 11, 2003
Posts: 478
Originally posted by Randall Twede:

credit cards are for fools is my opinion


Fools with Credit Cards -- dangerous combination
Smart People with Credit Card well utilized -- optimal
Smart People without Credit Cards -- foolish as they lost the opportunity to benefit


You think you know me .... You will never know me ... You know only what I let you know ... You are just a puppet ... --CMG
Randall Twede
Ranch Hand

Joined: Oct 21, 2000
Posts: 4347
    
    2

if you say so...myself i dont like exorbitant interest rates

what is really insane is these new payday loan companies and car title loan companies..i went into one once and they had posted on the wall that they charged over 500% interest compounded weekly

what is even worse is i would get thrown in jail for charging 1/10th that amount

its called usery (or loansharking), but i guess it doesnt apply to them, only to citizens and gangsters...

[ June 15, 2005: Message edited by: Randall Twede ]
[ June 15, 2005: Message edited by: Randall Twede ]
Aj Mathia
Ranch Hand

Joined: Apr 11, 2003
Posts: 478
yes you do get into the interest rate cycle when you fail to pay your bill on time. nowadays most CC companies offer C Cards without joining fees for a year. so you can get it practically free.
now you have flexiblity to roll your credit money during the interest free period. for example if you have regular bills of $x then use your CCard for this and "a stupid example" put this x that u have in hand into a 30day fund. end of 30 days pull it out and pay your CCard bill and make a profit of whatever interest from this fund.
On a broader sense roll it as per your risk analysis skills to maximize returns.
Aj Mathia
Ranch Hand

Joined: Apr 11, 2003
Posts: 478
Originally posted by Preeti Jain:

I am 24 years old working professional and want to start investing in shares.


Smart move.
there are other ways of investing but as far as investing in stocks , i assume you are looking at the indian market.
The best starting point is to utilize the information @ www.myiris.com .
I was in a similar state as you before and i found this site very useful. mutual funds was what sounded safe to me for a start as far as risk is concerned.
also todays rediff tips gives some investing writeup.
http://in.rediff.com/getahead/2005/jun/16share.htm
and
http://www.rediff.com//getahead/2005/jun/08stock.htm
Cheers
Jay
fred rosenberger
lowercase baba
Bartender

Joined: Oct 02, 2003
Posts: 11417
    
  16

there are things called Index funds. These are mutual funds that are pegged to some typical index, like the Dow, the S&P or something similar. There is no real 'managing' to be done, so fees are extremely low.

I don't remember anybody talking about this, but remember there is a difference between INVESTING and SPECULATING. if you want to make money in the next couple years, you are speculating.

investing generally means a 10+ year commitment. you put money in, and don't touch it for a LONG time. I've read that every major index has gone up over any 10 year period, so it's relativly safe. There are sites like Sharebuilder that let you invest a fixed amount every month, with something like a $4 comission per transaction. I use it to invest some money every month, and i never look at how much is in there or how it's doing. i'm planning on leaving it in there until i retire in about 30 years.
Rahul Juneja
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Joined: Aug 03, 2002
Posts: 425
Preeti,

Even i am not big enough to give you much advice, just 26 yrs but yeah can say somthing.

You know the best funda to earn money in share investing is Put money into good damn good shares which have strong back i mean companies which are backed by a good management team along with good funding, and then forget abt that for some time. just keep a track on that industry where u invested.

If you are lucky you will earn good amounts.

By the way what do the indian chaps have to say about Provogue and Yes Bank IPO.

Cheers,
Rahul Juneja
[ June 16, 2005: Message edited by: Rahul Juneja ]

Rahul Juneja
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Pradeep bhatt
Ranch Hand

Joined: Feb 27, 2002
Posts: 8919

By the way what do the indian chaps have to say about Provogue and Yes Bank IPO.



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