Stock Market Investment is not for just Profit, but for an Investment in Nation...!
I have little knowledge about the stock market when I started my first investment. In the name of stock market investment, I did much foolishness at first times.
I am writing this article with the purpose of being a lesson to those who started stock market investment.
I invested my whole money as lump-sum in the stock market without any basic knowledge of the risk behind it.
My Stock Portfolio is the continuation of this hub where I am trying to avoid all mistakes that happened in my first steps, and its successful growth journey continues since its inception on 4th May 2020.
Corona Lock Down Period started in India at the end of March 2020. During the period, I started to spend a lot of time with my family. I didn't rest at home too much time like this before. I was like a machine, every morning at 8 am, need to leave home and return only at 8 pm. About 3 to 4 hours need to travel every day to the workplace. From Monday morning to Saturday evening, this process continues.
Before my education, I entered in a Government job in India. To enter a Government job was a dream of Indian youths at those times because of its assurance.
Now matters changed. Jobs in Corporate and Information Technology Companies are providing better payment than a class 3 or class 4 jobs in Government Service.
In the beginning, I enjoyed my job very well. At those times, I felt boredom while spending at home during the holidays. My attitudes changed after some years. After marriage, I started thinking seriously about a passive income.
For a better living, a passive income is essential. It is very hard to live, if there is only one earner in a home. Reason is a limited salary with many loans. From the beginning, I started to save a part of money to Provident Fund. Through which, I have an extra income which is the only one savings in some months.
My First Steps
In 2007, I started to observe the Indian stock market Index Sensex and Nifty. Really, it was my first experience.
I started using a smartphone at those times with very low facilities. And used to read Google pages about the stock market.
However, I owned a De-materialized account and did some trades. Almost trades ended in small losses.
Story of a Huge Loss
In 2008. I joined in a Unit Linked Insurance Plan. I invested as lump-sum a big amount. This amount was the total monetary asset of my family.
It was really a bitter experience to me. In the market crash of 2008, we lost half of the amount within some days. I was totally puzzled.
By my persuasion, we invested in a 100 % stock market linked fund. I was not aware about the risk behind it.
Quite an unexpected experience was waiting which I can't forget during this life time.
About 50 to 55 % of the fund was lost on the stock market crash in 2008 - 09. I doubt the full money may loss in this way.
But I insisted on not withdraw the fund in Loss. I was among high pressure which exerted on me by my family.
The market roars up and down like Tsunami waves some days. Our fund too moved at the same power.
I was waiting for more than a year for the recovery of market. I withdraw the fund at the same moment with a small loss after a year. I remember that the total loss was about 5 % of the investment.
I temporarily step back a year from the market after this incident.
In the middle of 2009, I entered in a new job in Government was about 350 Km away from my home. I needed to stay away from my family. In my free time, I started to observe the market again.
The market fascinated me again. I owned again a new De-materialized account under another broker.
About 10 years from 2010 to 2019, I traded and invested using this Account. My trading was the most unscientific one.
I purchased stocks without watching valuation or quality.
Didn't check trading expenses. My profit during this period was less than Brokerage, Annual Maintenance Charges, Tax, and other charges.
My total investment during various periods during 10 years was 600,000 Rupees on various periods. My profit was below 10 %. . Out of which, 6 % was brokerage and other charges. Only 4 % was a real profit of me.
I thrilled in small profits. But considering inflation, this attempt too was a loss.
Cause of My Loss
By reading above, you may think about my foolishness in trading and investments. But the following matters should add to my follies.
- I have very little time during the days, because my job needs full concentration.
- My fondness for the stock market persuades me to keep relation with it always. Need to work every day, because I have a great responsibility as a single earner with my family.
- Lack of time is the real villain and I am unable to take long leave from my job till retirement. No assurance of fixed income from the stock market.
- I was unaware of booking realized profit at a bull time. At the next crashes, profits paved the way for lost and sold many stocks in the loss
I earned some money through mutual fund investment during the same period. From 2020, I started my third attempt in stock market. I sold some Debt Funds for INR 150,000 and invested directly in stocks from May 2020.
Till now, I got INR 25,000 as booked profit. My fund growth is above Large Cap Indexes.
- I got this profit by reducing Expenses through avoid unnecessary sells and purchases
- Timely action of booking realized profits;
- And through re investment in fundamentally strong stocks with good valuation.
- Included many ETFs to cut market risks.
I want to increase this invest of INR 150,000 to a big asset through wise decisions.
Also I will make further investment in this Fund.
I has write down a new hub about this investment as My stock portfolio.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Indra
Indra (author) from India on October 03, 2020:
Thanks for your encouragement, sir
Umesh Chandra Bhatt from Kharghar, Navi Mumbai, India on October 03, 2020:
Well presented. Nice article.
Bijoy Sivaraman on September 23, 2020:
This article will definitely help the beginners like me...Thank you