These are few questions that i have come across last few days at the social ocassion especially from the ladies in specific having no idea about stock markets and wanting to trade into Stocks:
Q.) How much should i start with? (They mean minimum amount they should invest)
A.)This to me seems to be the most foolish question someone can ask. And my answer to them usually is “Start off with something you can afford to loose (Ofcourse with a smile)”. First of all how can a person start off with a business about which he is completely ignorant? And when he/she intend to its highly probability event that people do loose money.(Well but i dont really discourage these kind of people who have some surplus fund.. Coz as far as there are people like these, people who trade with caution dont really need to fear…)
Q.) Which sector should i invest in?
A.) My answer to it is “In a sector which you are confident and you have a bit of background in it” The reason for that is its possible to take an action in case of abberant moves. Say for instance a person is well aware of the banking sector. He know more about it so he should try and invest more into that field. Simple reason being it would be possible for him to read the statemtents from the Goverment and make some sense out of that rather then waiting for someone else to tell him what should be done(by the time the stock has already taken a heavy beating). So bottom line is invest in something you know!
Q.) Index is at all time high. Is it a right time to enter?
A.) Depends on what kind of person you are. If you are a long term Investor you could wait for a fall (As market always give chance to the ones who have patience).. For a swing trader index movements hardly makes any difference as he is some one who will go with the trend.And rather more important thing is to look at the stock you intend to buy rather then keeping a watch on the index movement. Even if the Index is moving at an all time high and the stock you intend to buy is falling it makes no sense to look at the index and as it is index is rather made up of few stocks, so in markets there are always stocks that do not generally follow the market trend the rather setup one of there own.
Well there are many more… But i guess this gives a basic picture of most of the investor class in INDIA..and they keep on cursing stock markets for the Losses…
