This is the most basic question that every investor has, who entered the stock market recently.
Below are the most prominent ones in everyone’s mind :
- How can you Become millionaires in Stock Market.
- What are different ways in which you can do investment and become millionaires.
- How to make millions in the Stock Market.
Let’s understand how the Stock Market works. Imagine Stock Market to be a marketplace having both Buyers and Sellers. Product in this market place is different Company shares e.g. Apple & Microsoft.
Since the number of these company shares is limited and the price depends on the performance of the company, both buyers and sellers fight to get shares of this company. This is how the share prices go up or go down. When the performance of a company increases so is the share price.
Now let’s understand who all are the different players in Stock Market.
- You & Me, we are called Retails Investors who are investing a small chunk of money out of their savings.
- Mutual Fund AMCs/DII(Domestic Institutional Investors) , these are domestic Asset management companies handling mutual funds . These AMCs invest your money in companies by buying their shares either through IPOs (Initial Public Offering) or directly from Market.
- FPI – Foreign Portfolio Investors , These are Foreign investors investing in Shares of these companies. These Investors buy millions sometime billions of Dollars’ worth of shares.
- Foreign Institutional Investors (FPIs/FIIs) , these are foreign Asset Management Company investing in shares.
When Retail investors invest in the stock market they compete with these players, having all types of sophisticated systems to search for good companies in the market. These Players have a Team of Researchers suggesting they buy or sell shares at right time.
How can a Retail Investor Become Millionaire or How to make Million in the Stock Market?
Let’s see how Retail Investors can Become Millionaire through Stock Market.
- Invest regularly through Mutual Funds through SIP.
- Must have patience, Stock Market makes people Millionaire but it needs time to mature.
- You do our own analysis and invest in Stocks but that would need a proper research of company , reading their balance sheet and tracking their quarterly results.
- Start Stock Market Trading , Before starting Trading you need to research understand what Trading is. Many Newbies have just jumped in market without understanding what Technical Analysis or Fundamental Analysis is .
Let’s discuss the Pros and Cons of the above-mentioned ways :
- When you invest regularly in Stock Market through Mutual Funds SIP , You keep invested without taking tension of managing or tracking Market. These things are taken care by the Portfolio Manager who manages the Fund. Preferably the Best Way for a Beginner to be invested in Market.
- Patience in Stock Market investment is Key. Many investors loose money in Market because they don’t have Patience. When they see their Profits going Down , they tend to Panic and sell the shares they bought at low prices. Only to see that Stock going up
- When you do your own analysis and invest , you need financial knowledge to understand the balance sheet of the company. What their Profits are , What their Losses are . How much their EBIDTA Margin is .
Below are the important points to look at the results of the company.
- Top line growth and guidance
- Profit growth and guidance
- Quality of earnings for the quarter
- Comparison on a YOY basis and on a QOQ basis
- Guidance versus performance for last 4 quarters
- Look out for management warnings and audit qualifications
- Operating profits trend and operating margins
- Shareholding Pattern and Pledge data
4. Another way to earn money from Stock Market is through Stock Trading. Trading requires knowledge. Never Start Trading without proper knowledge as losses in trading can be more than your investment. Trading is highly risky and needs knowledge and backtesting of the trading strategies. When you learn to trade you can make unlimited money through trading.
Golden Rule of Trading “Never Be Greedy”
Let’s Look at the most potent way for beginners to become millionaires from the stock market. Regular SIP and Good Mutual Funds would make any beginners millionaires with the safety of their investment. Active Mutual Funds are managed by a team of portfolio managers and his team of researchers.
Talk to our Advisors to get the best Mutual Funds, Stocks, and ETFs for Investment.