What is Strategic Stock Investment Planning? Online Ways to do it

Now-a-days investing is very important as savings alone does not fulfil our financial goals and beat inflation. There are many investment options available in the market along with online stock investment options and you can select them according to your convenience and need. In order to earn good returns you should start investing at an early age. The habit of investment brings a financial discipline to an individual’s life as you periodically allocate some money to your investments.

You should choose an investment as per your risk appetite and the time frame to attain your financial goals. Certain financial assets help you achieve short term goals whereas other help to attain long term goals. Due to fast pace technology it has become easier to make investments and manage them wisely without any hassles. With the help of only a smart phone you can constantly monitor your investments and stay connected with the stock markets.

Read also: A Beginner’s Guide to Understand the Basics of Share & Stock Market

Online Stock Investment Trading Platform

Trading in stock markets has become easier and less time consuming as you can ‘Do It Yourself’ even without assistance of a broker. Just as you shop online for groceries, you can also buy and sell stocks online. There are online platforms available for trading in stock market investment. They are user friendly and you need not be an expert or take any special training for it.

For example: Angel broking App, Motilal Oswal Mobile trading app, ICIC trade racer, etc.

Mobile trading apps are very handy and useful for the investor as he can do the transactions of buy and sell in the stock market anytime and from anywhere.

Trading platforms offer necessary support and help by providing real time trading experience, price analysis of stock, research reports, market news, etc. You buy and sell shares if have access to internet and a trading account. With the single trading platform, you can also trade in commodities, currency, etc.

Online stock trading investment platforms provide high speed trading experience without any hassles. With commencement of new and improved technologies trading is simplified and you can do it yourself.

Online trading helps you to place and cancel orders in the comfort of your home. You can make your own decision without any broker’s interference. You can also invest in mutual funds and IPOs with online trading.

For trading online, you are required to open a trading or demat account with a SEBI registered broker. There are two type of share market brokers in India:

• Full-Service broker or Traditional broker
• Discounted broker or Budgeted broker

Full-Service Broker

These types of brokers provide complete trading, research and analysis of stocks, and advisory services. They also provide facilities to invest in commodities, currency, IPO, Mutual funds, forex, bonds, FD’s and insurance. They charge a heavy brokerage to their clients for the services they provide. They take care of your stocks and investments.

Examples of full-service brokers: ICICI direct, Sharekhan, Motilal Oswal are some of the esteemed brokers.

Discounted Broker

These types of brokers only provide trading facility and no other research or advisory services. Hence this type of broker is suitable only for those who are pro in the market, have good knowledge about stocks and markets. They provide high speed trading platform and charge low brokerage. It is quick and less time consuming. You have complete control on your trading.

Examples: Topmost discounted brokers in India are Zerodha, Upstox, 5paisa and Groww.

Read also: A Beginners Guide to Systematic Investment Plan

Strategic Planning on Investing in Stocks

Before investing in the stock market, you should throw light on the following areas in order to have successful trading:

• Assess your Financial Situation

The first step in strategizing your plan to invest in stocks is to analyze your current financial situation. You have to figure out your budget or disposable monthly income you can invest after keeping aside emergency funds and expenses.

• Goal oriented approach

It is very important to define your investment goals. Decide your goal that if you want capital appreciation of your saved income or create a passive income from earning dividends or just for wealth creation.

If you are following a goal-oriented approach then you should keep in mind the time frame as well. It is because different goals have different time frames. For example, your goal can be education of children, marriage of children, buying a car or a house or even retirement planning.

If you are clear on your goals you can decide on how much you want to invest and how long you have to remain invested.

• Determine your risk appetite

The next step in making your investment plan is to determine how much risk you are willing to take. Generally younger age group can take aggressive investors as they have more time to recover their losses, if any. Older age group should consider less risky portfolio.

In reality riskier stocks have significant returns but can cause huge losses. Investing in an undervalued stock can be gain or may turn into a loss. If you are planning to build your wealth then look for safe and good return stock.                                                                                        

• Research and analysis

Don’t blindly invest on tips from others. Do your own research on performing stocks and stock that are in losses. Doing research will enable you to gain confidence on where and how much you are investing.

You can begin with popular large cap companies and once you think you are getting comfortable in the market you can diversify to small and mid- cap companies.

Read also: HOW TO FIND A COMPANY THAT HAS THE HIGHEST SHAREHOLDER VALUE?

• Track your performance

After investing make sure you track on what you are investing. Make a spread sheet on the stocks you have invested in, the price at which you have taken and the current price of it. This will enable you to have an idea whether to sell that stock or invest more it.

• Have an exit plan

Always keep an exit plan ready. It can be done either by booking a profit or by cutting a loss. You can sell your good stocks in the following scenarios:

• When you are in urgent need of funds
• You see a better investment opportunity
• You have achieved your goal on investment
• Your stock has out performed

Bottom line

Investing in stocks has its own pros and cons. If you have just begun, you should spend more time on research and planning before investing. It is also very important to plan on how you will invest, the trading platform you select, etc. all these factors if taken care of can make you a successful stock market investor.