First steps in the world of stock market!!!

#1
Hi All,
I am very excited to step into the world of trading. Have been a member of this site for abt 4 days, and am already amazed at the wealth of experience and knowledge that this forum can boast of!! To someone like me, its like learning basic science from Einstein!!!! :)

Abt me and my trading till date: My broker is ICICIdirect. I started trading on 1st of Feb 09. My current portfolio has auto, power, entertainment and infotech stocks. I have started a SIP. My total investment till date is approx Rs10,000. I haven't sold any of my stocks yet.

background: I am an engg. 25yrs single. My financial status is sound. To put it in nutshell, I have abt Rs 15k every month spare (after my monthly expenses, EMI for house and liq assets for the 11th hr) and I have decided to invest that money in market.

My 2 pence: I am a complete beginner and have a few presumptions abt the market
1. the current market is probably at its lowest point or very close to it. from the peak of 21k its now abt 8.5k and although it may still go down, in the long run ( 3 to 5 yrs ) its bound to be closer to 15k then 10k i.e. atleast a 50-70% gain.

2. SIPs are going to be one of the best ways to invest in companies, that have a long standing brand name, but whose stocks have taken a hit rite now. my logic being, if the stocks continue to fall, i get more units and in the long run ( 3 to 5 yrs) the price is goin to be more then what it is today, resulting in good returns.

3. day trading is for pros and nebies like me sud not be doin it, atleast in the rookie yr.

4. A better strategy would be to buy stocks keepin long term objectives in mind, and if the price rises sharply ( 3 to 5% ), then sell if off on next day.

4. shorting is out of Q for newbies like me.


My experiences till date:

I have read a few threads on this forum abt ICICIdirect and understand that its not the best broker arnd. having said that, i have never had a problem with them in the past ( as my bank or broker ). I have however failed to understand their charges. have read a few threads abt how they charge, and it seems like transactions which are more then Rs 1000 get the promised 0.75% brokerage charge.

I have not sold any of my shares as yet. is brokerage and tax charged on the sell transaction as well???

is there a calculator to understand how much % return one stands to make in a transaction, considering all the charges, time value of money and inflation ?

All my stocks till date have been purchased based on just to factors :
a] brand value
b] current price Vs last 3 yrs avg price ( excluding the sharp rise and fall )
my logic being that as the market recovers, ( whenever!!!) these stocks should return to atleast their avg prices ( even if they dont go above and beyond them like most stocks in late 07 beginning 08 )

I have read that the investments should be made with a clear view of future requirements of capital. I however dont look at stocks as my go to option. its more of a 'take a plunge' type of investment for me. If I do well .....great.... if not, I wont be chuffed abt it, but it will not be end of life for me. Considering this, all the major sites that i browsed thru for advice, told me that i am in the ' risk taker' category. It was suggested that i sud go for 70% equity investment with abt 60% of it in auto and infra. Is that a fair assessment?

This is a completely new world for me and its nothing like what I have been used to. As a student of science and engg. , I am used to calculating each and every step to get to predicted results. Share market to say the least is any thing but predictable!!! I am really excited about the possibilities the current market scenario as i think it is the rite time to enter.

Thanks all!!!

And please let me know your thots on any and everythin. I am open to all suggestions and criticisms. Cause anythin thats said to me rite now by any of the members is goin to be additional knowledge!!!!
 

SavantGarde

Well-Known Member
#2
First Things First.....Welcome To Tradeji !

Have A Few Comments On Your Thought Process & Investment, But Will Reserve It For Next Time......:)


Welcome Once Again

SavantGarde
 

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