First Time Equity (stock) Investors

Here is all you need to know

Know the rules of the game

“Equity market (commonly known as share market) is place of possibilities. However, you can still play a good innings by following these important points”

Understand your purpose of investment

We advise you to have a “clear vision” before you push your money into stocks

Before you invest your money, broadly define your purpose into “Savings” or “Surplus”.

This would help you choose your stocks

For instance:

“If you are looking for ‘savings’, you can go for blue-chip stocks and hold them for a longer durations (Delivery), and if you are looking for ‘surplus’ you can use the ‘fast entry, fast exit strategy’ (Intraday)”

Keep your ‘time objective’ in mind

Doing the right thing at the right time would help you achieve your objective

While buying a stock, have a clear time-bound objective ready for its sale

For instance:

If you are investing for retirement, calculate your retirement age and expected return from the stock

Know your risk appetite

Risk appetite refers to the capacity of taking a risk at a given time. This would help you pick right stocks

Aggressive investors do not hesitate to take risks while investing in vulnerable stocks

Moderate investors take medium risk. However, they might buy tricky stocks sometimes

Defensive investors will not invest in dicey stocks and will only invest in stocks they trust

Know your risk profile(Aggressive–Moderate–Defensive)

Invest in what you understand the BEST!

It is always good for you to invest your money in the business you know better

This will help you understand future scope for the sector, expected growth, expansion, and risk forecasting.

For instance:

If you know the retail shopping market, you can make smart investments keeping future scope for FDI, FII, and growth prospects in mind

Stay updated on your stocks

Once you push your money into the market, it is extremely essential to track the progress of the invested stock

You should track all the news reports, discussions, court judgments, and other important updates such as M&A

This will prepare you for unforeseen events in the market

Don't fall prey to "Tips" or "Rumors"

Nobody can give you a definite tip about stock prices. Do not fall prey to such tips

Rumors are false information passed by people. Always confirm the source of the information

You can track their authenticity by approaching the spokesperson of the organization, stock exchanges official website/handles, and SEBI notifications.

Read financial reports of your investment

Reading periodic reports and financial journals will help you get actual insights

Company's annual reports and quarterly reports will provide you with credible numbers

These reports will also update you on the company's future avenues

Do not forget to SALE your investment at the Right Time

As discussed, stock trading is a game of possibilities. Thus, as an investor, it is important for you to exit the stock at the right time

Do not wait for unrealistic profit and grab the realistic profit

They say, “In stocks, your exit is more important than the entry”

Thank YouFor more information, visit

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Equity investments involve market risks.

Please read investment related documents carefully before investing.