POSTED BY June 28, 2013 9:40 am COMMENTS (20)ON
I got through this forum & found answers provided are very informative & learning.
I have a query.
I want to invest in share market. I am really don’t know much.
But considering my financial position I can’t invest a lot.
Max 2k – 3k per month.
Pls advise me If I should invest in equity or in MF or any other.
Is it mandatory to open an demat/trading account for this?
Wishing to guide me with your valueable opinion.
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20 replies on this article “Investing in share market in 2k-3k”
Thanks for your reply.
I do not know even a little. So I have been advised by everyone to go for MFs.
The book recommended by you “Invest the Happionaire way” seems to be good one. I visited some of the reviews and it seems good. There are lot of terms you need to know. Surely this book will help me.
The 5 point advice is good. Actually I think you have shared your personal experience.
I have know idea what is ETF?
What is customer centric brokerage house? What is difference between SMC Trade Online, Zerodha with sharekhan or angel broking?
Sorry for late reply, here a link http://www.zerodha.com/z-connect/blog/view/etf-exchange-traded-funds There’s a pdf link in that article. Read that.
Just don’t invest in MF-type ETFs, only invest in “index ETFs”.
I would suggest you to invest only in good stocks which have been performing well and will perform better. Take a look at- TCS, HCL, ITC, HUL, LUPIN, CIPLA Maruti, M&M etc. There are many more.
These companies are performing better since long time with good CAGR and annual PAT.
If you don’t want to take risk- don’t invest in small caps.
When you will invest, you will learn gradually. Happy Investing !!
You have mentioned some of the large cap companies. I mean blue chip stocks.
I didn’t understand “companies with good CAGR and annual PAT”
Could you pls make it clear?
i tried to log on the link http://bit.ly/1a9wmyS for accessing the book, but it is not opening due to any problem, may be speed of my net. kindly let the book attached with your reply here , if possible. thank you .
Would like to give your hard earned money to someone else and let them invest on your behalf? The answer is probably NO. Then don’t go for Mutual Funds.
Instead if you are afraid to invest in equity market or don’t know much, then invest in ETFs (Exchange Traded Funds). Do your own research on that. ETFs are for investing for long-time.
Remember these few points (holds true for first few years, then make your own plan):
1. Always invest for long-term.
2. Make your own decisions. Never invest on the basis of what those anchors or financial planners on TV channels say.
3. Never do intraday trading. Always go for delivery mode.
4. Invest one-third of your monthly income in equity market, save another one-third and spend the rest. Always follow this principle.
5. Sell only when you have made at least 20% profit yearly.
Two customer-centric brokerage houses are SMC Trade Online and Zerodha. Open account in any one of them.
I know you may still have doubts like how to choose which company’s share you should buy or when to sell. Read this small book—> http://bit.ly/1a9wmyS
This book helped me a lot. It’ll help you too.
This appears to be a confused kind of advise, asking to avoid mutual funds, then asking for ETFs (which are another form of mutual funds only), and then asking for direct investing.
Dear Ram, what about investing your Time in reading past discussions? all the queries asked by you ‘ll be answered automatically.
Dear Ashish & Ashal
Thanks for your reply.
The link provided is excellent.
I started reading the QAs regularly since last 15 days & gained some knowledge.
I must invest some more time for re-re-search (as pointed out by Ashal) before entering into financial jungle.
Thanks all for your valuable time spent on replying the questions.
Very nice answer. Thanks.
Now the point is where I should invest?
The market is flooded with a lot of options.
Where I need to concentrate on?
The ‘new & promising’ one or the ‘funds that are performing very well’.
Also pls advise me how you guys choose? Like the past performance, brand name, top management or something other????????
Before jumping on to investing your money in MFs, as suggested by dear Ashal, you need to invest your time in understanding the concept of investing in Mutual Funds. Yesterday’s Mint (newspaper) has a supplement on MF investing. You can get hold of the online copy on below link (try downloading the book to know more)
Download: Guide to Understanding MFs
I had started investing in MF in 2003 and have been a regular investor since then, though I keep on redeeming units due to personal requirements at times. In my case I look at what the MF scheme is all about and where is it investing. I also look at the past performance among its benchmark / peer schemes to understand if there is any major deviation. Look at the portfolio of shortlisted schemes to avoid duplication or minimise duplication within schemes.
You will numerous questions here, asked on how to select a MF and after going through the questions, you should be able to answer your own question.
For MF investment you do not need to have a Demat / Trading account. You can invest directly with the fund house. This will be best for you.
You need to approach the fund house AMC with filled up application form of the fund you wish to invest in (mostly available online) and some documents for KYC (since you are a first time investor). The KYC would include one application form, PAN, identity proof and address proof. Submit the KYC document and your MF application to teh AMC. Once the KYC is done your application for MF investment will be cleared by the AMC ad money will be invested as per the MF you have selected.
The other mode can be open a MF account with your bank (in my case I have opened an investment account with HDFC Bank) and have been investing online through it as per my ease. Here the NAV is slightly higher than direct funds since their is a commission to be paid to HDFC. You can avoid that by investing directly.
i suggest you to go through morningstar.in in addition to suggested above , particularly analyst rated funds (gold, silver etc.). you may select better.
Dear Ashis & Bharath
Thanks for you reply.
I found valuesearchonline.com, mutualfundsindia.com & morningstar.in are very good websites.
Yes I need to know basics before investing.
But I need a trading+demat account to start.
Depending upon investment size 2-3k/month, pls suggest me some trading account.
I suggest invest some time in reading various questions asked about investment in MF in this forum. Since you horizon is 15+ years, best is to invest in MF through SIP. But before getting into MF investment you first need to understand the same.
Questions here shall help you understand this. You may also look at Valuesearchonline.com, mutualfundsindia.com etc to know more about mutual funds.
Once you have some basic knowledge you can start investing in a single or two funds.
Go for mutual funds for now, given your relative inexperience and low amount.
But are you talking about SIP investment.
I think to infuse 2-3k every month.
Good you want to invest. But can u define your investment objective & time frame, also your risk appetite
Thanks for your reply.
I want to do this for long term. I think to infuse 2-3k every month for investing. I am inexperienced.So I can’t take high risk.
I look forward to next 15-20 years.