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Kanika Gautam
Last updated 28 Jan 2019 . 1 min read

How To Invest In Share Market - Investment 101 for SHEROES


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The mere mention of the word ‘investment’ brings to mind the whos who of the trading world. You think about your ‘Warren Buffetts’ and ‘Rakesh Jhunjhunwalas’. However, the idea of a homemaker making it big in the share market is scarce or dare I say unheard of.

The big question is -> Can a woman/homemaker/beginner invest in the share market?

Here are some comparisons that’ll help you find the answer.

  1. Women are patient rather than reckless
  2. We are pragmatic rather than overconfident
  3. We are prudent rather than hasty
  4. We think long-term and take fewer risks

All of these attributes combined point in the direction of a smart investor.

For women investing in the Share market is a means to an end. Their focus is on being financially independent and increasing the overall family income. Whether you are a working professional, a mother, a homemaker, or a government employee; having investment plans is a very smart decision to make.

My dear SHEROES, I am a huge advocate of financial literacy and independence and when I talk about financial management to women, it’s like preaching to the choir coz you know, you are the finance manager of your home.

If share market is still an unexplored area for you let me help you figure out the ‘what’ and ‘how’ of Share Market.  I am not a finical advisor by profession but there are things that I have learned by experience and experiment. Hopefully, some of these would be useful to you.

Here’s my guide to HOMEMAKERS INVESTMENT 101

What is the Share market? [Start at the very beginning]

Share market is a place where companies raise funds for the expansion of their business and for investors to buy a part in the ownership that will help the business as well as the investor to grow his/her wealth. In the share market, we can buy as well as sell shares. Majorly there are two categories of share market:

Primary share market: Here companies enter to raise funds for their business, they get registered to issue share to the public and raise money. Most of the companies get registered in stock exchange through the primary market route.

Secondary share market: Here already listed securities are bought and sold. One investor buys shares from another at the current price. This market offers investors to sell all their shares and exit the financial market; these transactions are generally conducted with the help of a broker. For Instance, Tata Steel is trading Rupees 250 a share, an investor can buy these shares at current market cost and will get part ownership of the company and becomes a shareholder of the company.

Most women fear the idea of investing in the stock market as for them it’s equivalent to gambling. I can’t deny the skepticism. Of course, it will feel like a gamble if you just dive in without any prior knowledge or experience.

Before you start your investment journey, go through these facts: -.

  1. Learn about stock trading. Get your hands on as much literature as possible including, blogs, articles, videos and the like.
  2. Understand the role of Stock Broker (A person who will buy and sell your shares on your behalf from the stock market).
  3. Get familiarised with online trading. The online option is convenient and better, things are just a click away. Take help of a financial advisor if necessary.
  4. Take it slow. Start slow if you are a beginner and gradually work your way up.
  5. Don’t get attached to your stocks, no matters how much profit you are earning from them. Always go for market trends and analysis, must do before entering into the share market investment.

Are you ready for a deeper understanding of the share market? Let’s answer some common questions that most women ask before entering the share market.

How much money do you need to invest in the stock market?

Start with a 1000 bucks, that’s a safe bet and a fine start for your investment journey in the share market. As a beginner a small investment is the best way to start, it will help you learn. Start with investing in only one stock and keep your options open between Rupees 1-1000. Moving a little further, invest in what you know already. There are a number of renowned brand names that you have probably heard of - like, Maruti, HDFC, Bata, Coal India etc. Find out data on these companies, do some research and invest in them. In case you are still stuck and don’t know where to invest, the safest is ‘Blue Chip Stocks’, they are reputed companies with a good track record and they are also financially strong.

How can I buy a share?

Few things are required before you start investing in the share market.

  • Id Proof -  You need to have a PAN Card
  • Get a broker - there are people who are authorized to buy and sell shares on behalf of their clients. Brokers are the individuals or companies who are authorized by SEBI (Security exchange board of India)
  • Get a DMAT and Trading account - DMAT accounts hold shares and stocks for you in your name and create a portfolio. Buying and selling of shares will require a trading account, so both the accounts are required
  • Unique Identification Number (UIN) - If you want to invest big (like an investment of 1 lakh and above), you need to have a UIN number.
  • Buying and Selling - Though the work will be done by your broker, still you need to tell him/her the quantity and price parameters of your to investment

How do I begin to invest in the stock market?

If you are doing this, do it right. To work like a pro-investor you need to follow some ground rules:

  • Set your goal - Why are you investing? To buy a car/house or your child’s education? When you know your goal, you also know how much and for what duration you want to invest.
  • Strategise/Plan - Your goal is set now you need to decide where you want to put your money, lump sum or SIP.
  • Watch where you are going - Keep track of your performance with the help of your broker or the trading platform.
  • Exit plan - there are two ways in which you can exit the stock market, when you are booking profit or when you are booking loss. The wise know till what time/amount one should keep investing and when one should take a happy exit.

How do you buy stocks without a broker?

There are many ways you can buy stocks without involving a broker.

  • Company’s direct stock purchase- This idea was introduced generations ago in order to have businesses get smaller investors who want to buy the ownership from the company directly.
  • Dividend Reinvestment Scheme- It allows you to take cash dividends paid out by the company you own and then invest them in buying more shares. Depending on an individual’s plan, you need to pay a nominal fee.

If you are just a beginner, thinking about investing on your own can be a risky idea, especially in the absence of in-depth knowledge of the stock market. So, it will be more lucrative if you go with the option of brokerage.

Cautions to be taken when buying shares from the stock market -

Being a woman managing home and expenditures can be a tough job, don't you agree? But then we manage to do it all. You got the smarts, now I’ll help you get street-smart. Here are a few things that need to be kept in mind if you are entering into the investment sector of shares and stocks.

a) Overtrading should be avoided -

Be aware of more brokerage and less trading, there is no hurry in making transactions. Take your time and weigh up how much profit you want to earn then invest accordingly.

(Check out - 3 High Cost Traps To Avoid While Investing)

b) Be aware of the myths -

There is no such thing as you buy at low and sell at high. Trade according to the trends; don’t trade with less capital at low margin.

c) Risk and returns -

Before investing thoroughly go through the Risk Disclosure Document and only then go ahead with your investment. Though all stock market investment carries some risk, with careful observation and assessment they can be reduced.

d) Don’t trade under the influence of greed or fear -

If you earned some profit from your investment; don’t try to lose it by investing in other trade, go as per well-measured and calculated plans.

via GIPHY

e) Don’t always depend on advice -

Sometimes even advisors are biased towards certain stocks, so analyse on your own and then invest. Don’t fall into the trap.

f) Expenses –

Gain an understanding of your expenses. While buying and selling stocks you will be paying brokerage fees, security transactions etc. this will affect your profit.

g) Stick to the basics –

Run some technical analysis of the charts before investing in them because fundamentally strong stocks won’t fall drastically even if something goes wrong with the stock market. Prefer charts over emotions.

Long story short:

You may be a diamond in the rough; however, with time you will get more involved, engaged and evolved. You’ll learn the stock market lingo and work the numbers to your tunes.

Regardless of your age, profession or gender, you can thrive because, stock market investment is all about gaining experience, investing better and earning smarter.

The good news for homemakers is that after a morning of household chores, you can also build your financial stature. So what are you waiting for? Hop on the stock market bandwagon and invest as SHEROES do!


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Kanika Gautam
An ardent writer, a serial blogger and an obsessive momblogger. A writer by day and a reader by night - My friends describe me as a nocturnal bibliophile. You can find more about me on yourmotivationguru.com

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Responses

  • S*****
    Its nice to gv ur all experince.i want to start.but couldnt find how to do.
  • K*****
    Thank you @urvashi srivastava
  • U*****
    Very informative. Thanks.😊
  • K*****
    @MeghaDhulekar @FaridaLokhandwala @SamikshaDaware @BinduDeshmukh Thank you so much for your lovely comments. I sincerely hope you’ll put this information to use!
  • M*****
    Thanku Kanika,nice info abt share market👍
  • F*****
    Thanks for sharing the details
  • S*****
    Wow very nice article.... It helped me lot for gaining my share market knowledge
  • B*****
    Thank you for the article Kanika. And for those who are really passionate about being an investor and wealth creator Women on Wealth is one of the best community. Please contact us at www.womenonwealth.in It's a platform run and managed by women.
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