How does someone gain in-depth knowledge about investing in the stock market?

#1
I am a newbie to investing in the stock markets, i would like to get some guidance on how to pick stock that give good returns in the long run? Also it would be nice to have some websites which recommend good stocks on a real time basis.
 
#2
how to pick stock that give good returns in the long run?
Picking right stocks needs years of experience and the investor must be well aware of the industry, sector, micro-macro factors and the list of requisites is very lengthy. It is really very difficult for mere mortals like us with limited salary or any other income based funding on which our sole livelihood depends.

What suites me best:
Generally speaking for long run, instead of searching for multi-bagger stocks and losing more than what gained in the process (often most of the time), I think Mutual Funds are best. But Markets operate in cycles, so diversification and asset allocation becomes quintessential.

When the broader Equity market index is in a downward trend, 40% of capital in reputed Mutual Funds with "Value Investing" theme (can be further sub-divided into different Mutual Funds), 30% in Debt Funds/NCDs/GSECs, 20-25% in PPF/NSC and the remaining 10-5% in Bank FD for emergencies.

And when in an uptrend, 40% of capital in reputed Mutual Funds with "Growth Investing" theme (can be further sub-divided into different Mutual Funds), 30% in Debt Funds or NCDs/Govt. Security Bonds, 20-25% in PPF/NSC and the remaining 10-5% in Bank FD for emergencies.

Moral of the story:
Do not keep all eggs in one nest, keep compounding, survive and spent on the interest gained and let your capital grow.
it would be nice to have some websites which recommend good stocks on a real time basis.
None reliable so far for me. My money, my decision, why take someone else's tip. Also please draw a clear distinction between the two terms - "Trading" and "Investing". It's not that trading is gambling but for these two inter-twined participation, different set of rules apply. Remember market is a nasty place to loose money easily and it is designed to fool masses especially new-comers.
How does someone gain in-depth knowledge about investing in the stock market?
They don't teach this in school and one needs to be "street smart" in order to survive in the financial markets. Reading TONS of market related books, understanding methods/processes/techniques, experimenting, implementing, failing most of the time, learning from mistakes, moving on, gaining experience, evolving mind-sets, becoming smarter with understanding of inner psychology, going beyond Emotions. In one word, "Perseverance".
 
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#4
Thanks for the reply
Picking right stocks needs years of experience and the investor must be well aware of the industry, sector, micro-macro factors and the list of requisites is very lengthy. It is really very difficult for mere mortals like us with limited salary or any other income based funding on which our sole livelihood depends.

What suites me best:
Generally speaking for long run, instead of searching for multi-bagger stocks and losing more than what gained in the process (often most of the time), I think Mutual Funds are best. But Markets operate in cycles, so diversification and asset allocation becomes quintessential.

When the broader Equity market index is in a downward trend, 40% of capital in reputed Mutual Funds with "Value Investing" theme (can be further sub-divided into different Mutual Funds), 30% in Debt Funds/NCDs/GSECs, 20-25% in PPF/NSC and the remaining 10-5% in Bank FD for emergencies.

And when in an uptrend, 40% of capital in reputed Mutual Funds with "Growth Investing" theme (can be further sub-divided into different Mutual Funds), 30% in Debt Funds or NCDs/Govt. Security Bonds, 20-25% in PPF/NSC and the remaining 10-5% in Bank FD for emergencies.

Moral of the story:
Do not keep all eggs in one nest, keep compounding, survive and spent on the interest gained and let your capital grow.

None reliable so far for me. My money, my decision, why take someone else's tip. Also please draw a clear distinction between the two terms - "Trading" and "Investing". It's not that trading is gambling but for these two inter-twined participation, different set of rules apply. Remember market is a nasty place to loose money easily and it is designed to fool masses especially new-comers.

They don't teach this in school and one needs to be "street smart" in order to survive in the financial markets. Reading TONS of market related books, understanding methods/processes/techniques, experimenting, implementing, failing most of the time, learning from mistakes, moving on, gaining experience, evolving mind-sets, becoming smarter with understanding of inner psychology, going beyond Emotions. In one word, "Perseverance".
Thanks for taking the time to reply to my query, much appreciated. Would you be able to recommend some books or reading material for me to learn more about investing. Also since I am just starting out i am only interested in investing and not trading. Can you also advice me if investing in blue chip stocks is a good idea?
 
#5
it would be nice to have some websites which recommend good stocks on a real time basis.
None reliable so far for me. My money, my decision, why take someone else's tip. Also please draw a clear distinction between the two terms - "Trading" and "Investing". It's not that trading is gambling but for these two inter-twined participation, different set of rules apply. Remember market is a nasty place to loose money easily and it is designed to fool masses especially new-comers.
How does someone gain in-depth knowledge about investing in the stock market?
They don't teach this in school and one needs to be "street smart" in order to survive in the financial markets. Reading TONS of market related books, understanding methods/processes/techniques, experimenting, implementing, failing most of the time, learning from mistakes, moving on, gaining experience, evolving mind-sets, becoming smarter with understanding of inner psychology, going beyond Emotions. In one word, "Perseverance".
Well said.....
 
#6
Can you also advice me if investing in blue chip stocks is a good idea?
As I mentioned previously, it is not easy to pick good individual stocks. Investment in "blue chip" companies does not guarantee sure high return. No company is immune to Global/Domestic Economy, Geo-Political, socio-sectorial factors. Its just that for me it is impossible to analyze everything before investing. So I think its easier to analyze the background of a Account Fund manager, performance of a mutual fund and understand its theme to invest accordingly. Instead of directly going for "blue chip" companies, you can go for ETFs. Believe me net-net you will make more money from good Mutual Funds and ETFs in the long term. I have already mentioned my asset allocation process.
Would you be able to recommend some books or reading material for me to learn more about investing.
I no longer read books on Fundamental Analysis for the purposes of Investing. I am investing heavily using Mutual Funds, Debt Funds, Balanced Funds for last 6-7 years. Rest with 2L-3L capital I am "Trading" short-term Equities or Futures (couple of days to 2-3 months at the max) using Technical Analysis. I could never understand Fundamental Analysis rather could properly implement it, so has left it to the professional fund managers to deal with. Now my focus has shifted to studying and understanding Options.

For Technical Analysis I can suggest you to start by reading Murphy's "Technical Analysis of the Financial Markets". Check this Quora link to find books online.
 
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#7
As I mentioned previously, it is not easy to pick good individual stocks. Investment in "blue chip" companies does not guarantee sure high return. No company is immune to Global/Domestic Economy, Geo-Political, socio-sectorial factors. Its just that for me it is impossible to analyze everything before investing. So I think its easier to analyze the background of a Account Fund manager, performance of a mutual fund and understand its theme to invest accordingly. Instead of directly going for "blue chip" companies, you can go for ETFs. Believe me net-net you will make more money from good Mutual Funds and ETFs in the long term. I have already mentioned my asset allocation process.

I no longer read books on Fundamental Analysis for the purposes of Investing. I am investing heavily using Mutual Funds, Debt Funds, Balanced Funds for last 6-7 years. Rest with 2L-3L capital I am "Trading" short-term Equities or Futures (couple of days to 2-3 months at the max) using Technical Analysis. I could never understand Fundamental Analysis rather could properly implement it, so has left it to the professional fund managers to deal with. Now my focus has shifted to studying and understanding Options.

For Technical Analysis I can suggest you to start by reading Murphy's "Technical Analysis of the Financial Markets". Check this Quora link to find books online.
Thanks @CougarTrader for the detailed answer, much appreciated, i will go through the books recommended above .
 

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