June 15, 2021

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How to start trading and investing in Indian stock market?

How To Start Investing as a Student- Best Ways

Undeniably true, Investing can be a tough task when you’re young, down& out, and running up student debt. Investment capital includes setting cash aside to grow in real terms – that is, your money collects faster than inflation (the rising prices of goods and services). This means that, in time, you’re better off than you were earlier. Being a student, investments are possibly the last thing on your mind. You might have heard your parents or elder friends communicate about investing in stocks or mutual funds. Therefore, being still a student, should you be thinking about investing or investment? Probably true. There are few stunning pros that you can reap if you begin investing the day you turn eighteen.

The first and foremost pro is the fact that the longer you stay invested; the better chance you have at making wealth at a younger age. Also, a young age student brings a higher risk tolerance since they have more time to recover from any setbacks in their fund’s investments. Finally, you get the great opportunity to advantage like- eighth Wonder of the world – compound interest. But, investing comes with few certain risks. Whence, understanding all features and aspects of student investing is important to avoid creating erroneous decisions. Here are several tips to help and assist you to start investing in the US from India while in college itself. 

1-Determine the amount available for Investing- Students frequently take up part-time or odd jobs or freelancing gigs (work from home) to earn some pocket money. Whereas the students use their money to fulfill the lifestyle desire of modern-day life, a little part of it can be devoted to investing and developing a financially safe & secure near future. Whatever is your source of student income – a job, tuitions, freelancing assignments, or pocket money, just try to discover the amount that you can set aside each and every month to invest. Hence, do not expect it to be a lot since you are not on a full-time job as well. Always remember that a little amount saved and invested present time can multiply exponentially over a period of time. Plus, do not try to cut down every cost and invest all the money. As student time is the best days of life and should be lived thoroughly. Work towards making a balance between the money you spend on yourself and invest. 

2-Time in the market Is Better than timing the market- The finest way to multiply your money is to invest it and cater it time. Unluckily, when most of the time youngsters invest in the equity market as well, they try to look out the stocks that can provide the high-multiple fund returns in a short period of time by their purchase and buying when the stock price is at its lowest. This can be an ineffective ploy since trying to time the markets can backfire and your investment can lose value. However, a long-term approach is much better. Here are few tips to help and assist you to understand.


Learn How to Invest –

If students do not have a savings account, get one opened soon. We are presuming that you are above eighteen years of age since it is mandatory to be 18 plus to invest.

Open accounts: Open a usual savings account with a minimum average balance need and requirement. Get start depositing your savings (the amount you need to invest) in the same account. If a student desire to invest in stocks, then he/she will have to open a Demat account and an online trading account. You will also require to get your KYC (know your customer) done to get these accounts opened. To make sure that you have entire the documents in place.

Learn: Learn about an array of investment choices and options available like stocks, mutual funds, gold, fixed-income securities, PPF, etc. Understand the risks connected with each of such investment choices and the returns that you can expect. As a basic rule, higher probably returns usually come bundled with higher risks which means that student can lose their invested capital too. Hence, assuring that you understand all such features very well.

Stock investments: As a young person, stocks are the best place for students to start investing. Indeed, they come with high volatility, which is one kind of risk. But over time duration, they provide strong returns, and since you won’t be retiring for a lot of years, the student can simply park their money and ride out the occasional stock market correction. If students have never invested in the stock market earlier, then it really looks overwhelming from the outside. You hear analysts speak about PE ratios and dividend yields, concepts that may be a bit blurry for you. And there’s always someone pointing to some unclear or uncertain technical indicator proving that the same market is about to crash. But do not fear about it all just follow these tips. However, if you are sure and planning to make stock investments, then learn or discover if you want to invest for the long term or get into day-life trading. If a student invests in fundamentally strong stocks for a long period of time, then you have the best opportunity to generate wealth. Also, starting early provides you the option of tiding over volatile markets with ease mode. On the other side, intraday stock trading has some pros and cons that require to be considered carefully before you begin trading. 

Mutual fund investments: If students think of mutual funds, then try to understand the various kinds of funds available which are connected to risks and returns, and costs. Mutual funds are created for investors who are not aware of the way the market well and works since a fund manager takes care of each and every investment decision of the fund’s portfolio. Hence, students should need to do is monitor the performance of the money rather than individual securities invested in by the fund. Liquid mutual funds are a great option for young students, stock market India as they provide better returns than the regular savings bank accounts along with high withdrawal flexibility and can help & assist them in achieve short-term aims. So, if the student has been a desire to buy an expensive e-gadget but your parents or family members have not been keen on it, then you can start investing small amounts that you save from your pocket money or part-time gigs into liquid funds and assemble the funds required to get the purchase.

Gold investments: There are a lot of smart ways to invest in gold like physical gold, digital gold, gold bonds, gold ETFs, etc. If students really need to familiarize themselves with gold, then digital gold can be regarded as you can begin to buy gold in grams which is equivalent to a price as less as Rs 10. While such kind of investments permits you to pros from the rise in the price of gold, but it has linked risks too.

4- Don’t put all your money in one bucket; Diversify- Diversification is the main key to managing risks for every student. Even if you are investing a small amount every month, never invest it in the same set of market securities. So, if you are investing Rs 2,000 per month in stocks, then make sure that for at least three months in the year you invest the amount in a fixed deposit or gold, etc. student Investing all your money in one investment option reveals the higher risk since anything going wrong there can damage your investment a lot. 

5-Stay calm & Patient-  Do remember, starting young is beneficial if you stay invested for a long period of time. If you choose or select fundamentally strong or popular investments, then avoid all desires to break your investments early. The longer your money will stay invested, the much better returns they might be able to generate.

Read How to start trading and investing in Indian stock market

As a student, you’re in a particularly strong position to get a head start on wealth building. While your friends are pumping every single money into things like flashy cars and going out each and every night, the student can start making stealth wealth for themselves. Most investors regret not beginning earlier in their lives. If you have the foresight of planning any kind of investments while in college or something, you have already taken a step towards success that most successful investors didn’t when they were of your age. Back yourself and consult a family member who is aware of student investments to help and assist you get started.  The most essential point for students who are finding to then invest is also the most urgent. The earlier students begin learning about the investment market, the sooner they can begin planning their financial near future. Students can start with modern amounts of funds and hopefully increase both their knowledge and portfolio too. Good luck!


How To Start Investing as a Student- Best Ways