I started investing in stocks from Jan 2018. I have a habit of learning/acquiring knowledge in one area and jumping onto another area frequently. This time, I wanted to at least focus on this for a year and acquire in-depth knowledge as much I could and here we are. I will share my thoughts on what someone would need as beginner to start. When & How to start are the biggest questions always. How to start can be a tricky question, as now there is no lack of information but information overload. I was helped by my good friends (Annamalai M & Gomathi Shankar M) in that aspect and the final question, When to start ? this is simple, There is no better day than today 🙂
What you need ?
10th grade math/English is more than enough for reading books, materials, reports and doing your analysis. You need to invest considerable amount of time(~8 to 10 hours per week) at least in the early years as you have pick up lots of knowledge through reading books or podcast or videos etc at the same time, analyzing and looking for companies to invest. May be the hours you need to spent may be more in the initial years and it may go down in the future ( but I don’t know that yet 🙂 ). You may not have the passion, but at least you need to have interest to keep learning or knowing about things. After a point, investing can be boring/individual task. You won’t/can’t be making money at all the times and you need that interest to keep you moving forward without the light. It’s good to have a buddy to you ask questions in the initial days/ bounce your thoughts/ discuss your ideas. Though google is there, this will speed up your learning. I’m lucky to have a friend, who was ready to help (Goms).
Is investing for you ?
So next, if you won’t be able to spend required time or focus every week and not interested in the working of markets/companies or regularly following them or you don’t have the stomach to see the invested amount going down or making a hard decision to sell a stock @ loss (you will understand this only when you see your hard earned money drops digit by digit) .
If you think, you don’t have those qualities, Then the best course of action is you should be investing your funds through the index funds, mutual funds or through a financial adviser. It’s very easy to lose your capital in the stock markets than increase it. Lots of the retail investors like us tend to lose our money like 20 to 30% here and there and in the end it will come to nothing or gross under performance. So if you are not beating the index consistently, you are better off investing through other means and spend the time for something else. If you still want to do this as a hobby or time pass, you should do it as it yours money but that capital will eventually move to better investors.
Why should you give a thought to do this?
Stock markets presents an unique opportunity, you can as a novice, can compete with the best in the business with dis-proportionate assets/resources and still you can come out victorious. This is a typical David vs Goliath scenario. You don’t need a financial degree, number of people working for you or huge capital reserve. I don’t see this kind of opportunity in many of the business but I see it here. It’s something like in sports, a minnow can challenge the mighty with the sheer will of the imagination, dedication, hard work and perseverance.
Resources
So finally, for what you are here. There are abundant resource available in the internet/libraries/ book stores now . when the music exceeds the limit, it’s noise. So I’m hoping to give you some music.
Books
The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments
The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment
The Dhandho Investor: The Low-Risk Value Method to High Returns
The Big Secret for the Small Investor: A New Route to Long-Term Investment Success
One Up On Wall Street: How to Use What You Already Know to Make Money in the Market
Video Channels/Podcasts
The investor podcast – their weekly show is very informative and have good executive summaries of the books in their websites as well
In Preston Pysh’s youtube channel, Both the investor podcast and invest like warren buffet series are good.
Investor archive had some good videos.
Sanjay bakshi’s blog also is a good mine.
These are some of the good twitter accounts to follow. I follow many more accounts with useful informations, you can find that out @vinodhkumar
Finally
Learning to know about, how economy works and terms associated with it will help in connecting the dots. But All the resources mentioned here are the first step in your journey, for advanced learning there are more books/resources available. Happy learning !
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