Most often the best questions come long before you deep dive in …& in the case of Stock Market investment the most precious question often is “How Much?”
If you go through the different advertisements of the people who provide you the “best ideas” of the stock market you will often hear they have made millions in the stock market. More often you will hear in 1 day they have made some lakhs from the bare minimum. But if you ask them a single innocent question, “what was your first capital when you started investing in the Share-market?”
Knock ...knock….No answer.
You might be wondering...this is a simple question, then why nobody is answering... but this is true and the most innocent truth. Market Pundits will show you the snap-shots of shares taken, profit from it...will do a lot of other things also to gain your trust but will never answer you this simple question. This was the answer from our beloved all known Hari Chacha.
Hari chacha is a maestro of a little bit of all things in life you ask him how to shoot a Rhino to build an Igloo. He knows them all ... though how he knows them is quite a bit of mystery and we might need a combination of Sherlock Holmes and Hercule Poirot to reveal them but the advice Harry chacha provides never fails.
So the next question we threw to Hari chacha was so what to do? Is there any scientific method or any practical solution to this question? And to our utter disbelief, Hari chacha gives us some very simple methods on this.
His first question was first you need to know, in the share market what kind of shares or what kind of trading you want to do. There are ample and different ways to get into it. It might be
- Stocks number
- Penny stocks
- Cryptocurrency
- Forex
- Commodities
- Gold
- Future
- Options
But in most cases, we find for beginners to start with are stocks also when we finalize what we should deal with the next question is how to deal with it. It might be :
- Daily trading
- Positional trading for long term trading.
Let us choose daily trading as this is one of the most preferable ways for most of the traders who are starting their journey in the market.
So now we will look into only the initial investment for the share market. When you look at the share market picture there are huge differentiators. So while thinking of investing you have to choose which share market you want to invest in. As a Global Citizen in today's date you can invest in any market you can think of, be it Nasdaq or Dow or S&P or be it our very Indian BSE or NSE. Let us choose BSE or NSE to answer this question. if you are a beginner and don't have a plethora of experience in that case you should go ahead with the safe and sound Nifty 50 shares. Now the Nifty 50 shares range from around 50 rupees 12 to 2500 rupees. So your dilemma continuous... what to do
Now in the case of India while looking at the daily trading options there are a lot of brokerage platforms that give you a huge amount of leverage to do daily e-trading. Depending upon the brokerage platform and the share you are choosing sometimes you can even get 15 times (15x) of leverage, which ideally means if you have thousand rupees and investing in a particular brokerage firm for a particular share for daily trading you can get a chance to invest 15 times of thousand, which is 15000 rupees, so basically it depends on the share you are trying to buy and also the platform you are using if the combination is perfect then not only you get huge leverage but also the commissions and other charges are very less compared to the profit or loss whatever you are making. Now mind it whenever somebody says investing of share market if you fail to count not only the profit but also the loss which you might make then you should not be into the share market. It is always better to know both the positives and negatives before getting into it.
Having stated all those now it's time for beloved chacha to shell out the different processes to understand what should be our initial investment
X/ 3 strategy
That as a beginner you should invest only one-third of all the money you intend to put in so if you have a capital of 10000 to start with you should put 3000 of it and start trading. In case your strategy is working well and you're doing well with your initial 3,000 then let it grow up to 6000 before putting in any single additional money on top of it.
100 minus current age
This is one of the oldest strategies to understand what should be your investment. The premise of this strategy is based on the notion of reducing your risk gradually as you age. As for this strategy if you are 27 and your total savings is 10000 rupees then your investment should be 100 - 27 =73 Percent of your total settings which should be 10000 INR * 73% = 7300 rupees
Optimum Strategy
Like every other field, this strategy is also “A glass half-filled” strategy. This strategy says, your first investment should always be the amount of money which you think will not make a difference to you. So if you think that losing 5,000 doesn't make a difference to you then your initial investment should be 5,000 if you think that losing 10000 hours and minutes was to you then it should be 10000. Although a lot can be said about this the beauty of this particular strategy is it makes a mentally prepared that if you lose the money also mentally it will not Crush you because you have made up your mind that you have lost the money so whatever profit you make that makes you it's joyous.
There are also at least another dozen strategies just and equitable and can be debated through over which I am very sure. But if you have Hary Chacha with you, you only look at what is the best of all the options right?
If you properly answer these three questions and you know the answer to them then you know how much you need to invest in daily trading in the Indian share market.
But finally, Harry chacha winks and says you know in this covid pandemic, lockdown era a lot of new Pandit has emerged like a mushroom cloud. I don't know if it is better or worse but be rest assured to start with you should be confident Systematic disciplined and honest to start with not less than 7500 and also not higher than 15000 rupees and you can safely sail through.
Please do share your thoughts if you think we can put feedback to Harry chacha and share your thoughts wisdom with him. And you know Harry chacha is always full of wisdom to share with.
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