Before start invest in the equity market, either through secondary market i.e mutual funds or primary market i.e stock market, you should have some information in hand.
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Know About Yourself: The first and foremost thing before start investing is knowing yourself. Knowing yourself mean what kind of a person you are in terms of risk taking. It depends on some other factors as below.
- Your total annual income: Your investments in equity should be reasonable compare with your income.
- Sources For Your Income: Is your income is fixed like employment or not regular like business?
- Risk Taking Nature: Can you sustain to huge risk, medium risk or marginally low risk?
- Your Responsibilities: Who are dependent on you and how much of your investment is towards fixed assets?
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Know the area of investment: Once you have enough information gathered, you have to decide the place in which you have to invest in. This depends on the above information.If your income is sufficient and you can sustain the risk for the investment you are investing, then you can go for the equity market. i.e, mutual funds or share market.
If you are not willing to take high risk but can take some risk, go for the balanced funds which are the mix of equity and debt schemes. If you are not willing to take risk, you can go for the debt schemes or the fixed deposits etc.
- Gather the information: Now you are ready to start investing. You have to gather the information as much as possible on the area in which you are investing. You can find vast amounts of information on the Indian Stock Market on this forum, boddunan.com, and also on many sites which will provide you enough information on other areas.
- Set Your Goals:Once you gather as much information as possible, the next thing is set your goal of your investment. What is the rate of growth you are expecting, what percentage of profit you are expecting in what time etc.
- Monitor Your Investment: Many people think that investing for long term means investing and leave it aside which is not the correct thing. You should always check your investment and the growth rate of your investment at regular intervals.