The Stock Market is a place where the trading of assets takes place. Assets in the capital markets include Company Shares, Currencies & Commodities. For the ease of understanding this article, we will be talking about Company Shares when we talk about the Stock Market.
The Stock Market has rewarded many who have shown patience, good investing practices, and the lack of emotions. On the contrary, the market has punished those that have made their decisions haphazardly, or because they were advised to do so by a ‘friend’ or ‘colleague’.
These people who discourage the population from investing or trading in the stock market are the ones who have lost money because of their own foolishness. Before We talk about the importance of Stock Market Courses, let’s discuss why one must trade/invest in the Stock Market.
Where can one Invest their Money?
The sole reason anyone invests their hard-earned money anywhere is on the hopes of getting returns on their investments, and thus creating wealth in the long term. The stock market can be a fantastic place to generate such returns, especially is one is well versed with Trading and Investing.
Before we talk about Stock Market Returns, lets have a look at the other possible options one has to invest their money.
This is the first place anyone’s money goes to when they get paid. If one decides to leave their money in the Savings account of their bank, they would be eligible to an average of 5%-6% returns annually. At this stage you must be thinking that this is a safe 5%-6%, right? The answer is no. Banks are also subject to losses like any other business, and when things get too bad, even banks can close.
Fixed deposits are the next best bet for those who are not willing to take any risks. Although less in reality, Fixed Deposits provide investors anywhere between 9%-11% return on capital on an annual basis. By these returns, it would take decades to amount to any sort of wealth.
Government bonds are the next safe bet when it comes to investing money. Although the bond market is subject to its own volatility, bonds are considered safe and provide similar returns to Fixed Deposits. Which means, to accumulate true wealth, these instruments would take more than a lifetime.
Real Estate is a good investment in an area that will possibly see some sort of development within a few years. The only drawback is that this kind of investment requires a large capital and is not doable by the common man unless he/she is purchasing a house to live in, which is not really a liquid asset.
Another common instrument for investment in the Indian household is in Jewellery, especially made from gold. Gold is another slow-moving asset and does not really help a person create wealth, however, is a haven, especially when times are bad globally.
Within art, there are several kinds such as, Antiques, paintings, carvings, and so on. Although art could provide value in the years to come, there is no sense of assuredness or any kind of sense of how long that could take. Most of the times this too is expensive for the common man to consider investing in.
This list sums up everywhere one could legally allocate their money and the kinds of returns they could expect. We left out equity here. Equity is another word for the shares of a company.
Why should one Trade/Invest in The Stock Market?
Firstly, the stock market is open to each and every one. With shares trading at different prices, everyone can think about investing their money there. This is the first and most important aspect of the stock market.
Nifty, which is an index by which the whole country’s stock market sentiment is gauged, has provided an average positive return of 15% every year. This is taking into consideration all the bad times the financial markets went through. As can be seen, just by blindly investing in the Nifty 50 stocks, one could gain a decent 15% return on capital.
This also, fails in comparison when one does their own study and makes their own decisions. Through gaining consistent returns and compounding, one can amass a huge wealth within their lifetime.
What is Compounding, and Why is It Important for Investors?
When we talk about compounding in the stock market, what we basically mean is reinvesting the returns made from an investment back into the investment itself. This way the investment value multiplies and the more time one stays invested, the better the returns get.
As a matter of fact, if one can generate 23.5% annually consistently for three years, their money would have doubled by the end of three years thanks to compounding. Such returns are possible without spending much time in the markets and are also possible through investing in mutual funds.
However, through proper use of Technical & Fundamental Analysis, one can also generate 5% of their capital every month. If one can do so successfully a capital of 20,000/- by the end of 20 years becomes 246 crores. Although this seems like a huge figure, it is completely attainable if one knows when to enter and when to exit their trade. In simple words, all one hopes to master when deciding to learn about the stock market is when to buy, and when to sell.
How can one go about Learning about the Stock Market?
There is no single strategy that works all the time. If this was true, then everyone would only make money all the time. It is also not possible to be accurate 100% of the time. Anyone who says so is lying. The stock market is a volatile place with each new day bringing several factors that affect the prices of assets.
Understanding the Stock Market is not a one-time thing. Even people that have been trading or investing since years learn something new every now and then. Learning about the stock market is a process. It is completely subjective, and one must for their own logic as to why prices move the way they do.
If one requires the right direction to be pointed in, they must be ready to invest some money in educating themselves on the topics of Trading and Investing.
It is understandable the there is knowledge and information available for free on the internet. However, this is a double-edged sword and can hurt traders rather than help them. There is so much of noise that the information seems to be contradicting itself. Here, an expert in the stock market is better suited to guide you. Not only will they teach you the fine tricks of the trade but will also teach you everything they have learned over the years.
When looking to learn about the stock market from someone, make sure that they teach different strategies for every type of market situation. Also, since there are various types of market participants such as intraday traders, swing traders, and investors, make sure to ask them to determine which style of trading/investing is best suited to you personally. They should be willing to do this free of cost. Furthermore, since they are confident in their strategies, they should also be willing to teach during open market hours. An institute that practices this kind of a checklist seems worthy of learning from.
One such institute that provides Stock Market Courses in Mumbai is Goaled. They also teach online, are extremely affordable, and offer lifetime support to their students. Along with that, they have different strategies for the different styles, and are open to teaching in the live markets.
It is always good to make your own decisions after understanding a topic rather than depending on someone else and risking your hard-earned money. Learning about the stock market does not have to be a difficult task and is open to everyone.