My name is Sagar and in this article, we will talk about how to invest 10000 Rs in the stock market many people have asked me how would I do it.
I will cover each topic such as how to select stocks and how much money you should put in each stock I would like to mention something before starting the post.
If you have decided to invest 10 000 Rs in the stock market, I would like to congratulate you because many people prefer to spend this money rather than invest it but you have decided that you would like to invest in the stock market.
So let’s start with the stock selection?
How do we pick them?
I will share two strategies.
Firstly, start by picking simple companies.
Let me give two examples.
You may have heard of Page industries everyone knows their products (Jockey underwear ) they had great success in the stock market as well please keep in mind this is not a recommendation, it’s just an idea for stock selection let me share another example.
Many people are familiar with Hindustan Unilever They have brands such as Ponds, Dove, and Lux which you might have used sometime but you might be saying these companies are very expensive.
So I will share another strategy You can pick companies which operate in some sector that you are familiar with.
Maybe you are working in that sector If you are working in the banking sector, start by checking the bank.
This can be private or public banks.
Once we get one stock. How much money should we put in it?
Should we put all in one?
I never recommend putting all the money into one stock.
Let me explain why. Let’s say you invested all the money in one stock and the next there are some changes made by the Government which affects your company directly.
This wasn’t in your control but it will affect your stock.
There are many companies that are heavily regulated by the Government.
I would suggest at least two stocks but maybe you don’t feel comfortable with two stocks and in that case you can invest in three stocks.
But you don’t need to invest in more than three stocks simply because 10 000 Rs is still a small amount.
Even if you get good returns on some stock, if you have six of them in your portfolio, it won’t affect your portfolio so much.
Keep in mind that if you invest in five stocks, you will have to track them later.
The current economy is global so you will also need to track what is happening in the US or China because it might affect your company directly You will have to read their quarterly reports and see how they are performing as well.
That’s why I suggest investing in two or three. Let me prove this with one example.
Imagine we make a portfolio with 2 stocks. the first stock grows at 26 % CAGR for 10 years (if you find such stock, please write it in the comment as well ) and the next stock plunges 26 % CAGR what do you think will be your result after 10 years?
I would like you to pause and comment.
Let me show you in the image.
We have one stock going upwards and one stock going downwards.
After 10 years, your portfolio will show 17 % CAGR growth You might be asking how did this happen?
This is simply because the growth stock (50 % of your portfolio ) takes care of the rest of the portfolio The third step is diversification.
If you decide to invest in two stocks, please make sure they are in different industries.
Don’t invest both of them in banks.
Or one in a bank and the other in NBFC because eventually they are in the same segment Diversification is very important if you are investing in only two stocks.
Maybe you can choose bank and aviation (Not a recommendation ) You need some variety because if one sector underperforms , you will still have another that will take care of your portfolio.
Now you know the three steps needed to invest 10 000 Rs but there is one more thing left, which is how to track your company.
Once you have invested in any company, you will need to track your company.
As I mentioned before, this is a very dynamic and global economy There is always some news that could affect your company so you need to be aware of it.
If you invest in some company and you have no idea how to track it, then you shouldn’t have invested in the first place Let me give one example.
Imagine you invest in the steel sector because you think that the Government is pushing local production This is true.
But my question is, should you be tracking how China is doing with steel production?
If you do decide to invest, you will have to track China.
This is because some time back, China was dumping steel in India. Everyone is still tracking it but we know that the Government wants to support local producers.
There is one last tip left, many people associate investing with the stock market only but you can invest this money in yourself.
Maybe you don’t have a financial background I didn’t have a financial background.
I’m a Doctor and then I switched to investing I read a lot of books so I could learn fast and I still read one book every 2 – 3 days so I could increase my knowledge I will make videos on some books so I can help you more.
But you can invest this money in books or maybe you prefer to take a course.
I have my course where I teach how to invest in the stock market there are many ways to learn.
Maybe you prefer to go to a seminar to learn more It’s good to invest in the stock market you will get great results if you invest in yourself don’t forget to subscribe if you want to see more articles