Skip to main content
stock market books for beginners
By
Sonam Midha

 

Are you the one who considers the idea of investment a much better recourse rather than to be contingent on a single source of income rest of your life, but you don’t have much time due to your rushed work schedule and thinking of exposing yourself to an alternative which doesn’t demand much of your time at all. Well, stocks might be your key to go. 

 

Don’t know much about stocks or how they operate? Don’t you worry, we are there to rescue you. In this article we will be throwing light on various beneficial facts of stock market along with all the risk it has and we will also incorporate the books which might be beneficial for you to understand the concept of stocks under the heading “stock market books for beginners”. 

 

Difference between stocks and Mutual Funds:

So the 1st question is if someone would knock on your door and will say give me your money and I will double it in 2 years, I know that you will close your door and ask them to leave without a single thought but What if I will say it is true with the help of Mutual funds! 

 

But to learn how? First of all we should understand “What are Mutual Funds”? 

 

So understand that let’s take an example. 

 

Let’s suppose you want to eat something very delicious, a dish which you just heard is tasty but never actually cooked it. 

 

For that, 1st thing you can do is to learn the recipe, collect the ingredients and then give it a try, but the risks are very high, you never know how is that going to taste. 

 

2nd option is you can go a restaurant and order your dish. this time you can expect a good taste as now it is cooked by a professional who has made it numerous times before.  

 

The 1st case was you investing in Stock market on your own and the 2nd one was Mutual funds in which you take the help of fund manager to do the work for you. So, Mutual fund is like an organisation where people like me and you invest and it is reinvested further in something that gives us higher returns. Mutual fund organisations helps you to earn big where you just have to sit in your house and they will work on your behalf. Your money will automatically generate more money and you will get a return higher that your regular savings account. 

 

Let’s understand how does that work! 

 

For example I have a mutual fund organisation and, you will invest 1000 rupees in my company and similarly 9 more people like you did the same. Now we would have a money pool of 10,000 rupees and now what we are going to do is to invest that 10,000 in Equity i.e., Stock market or in debt (That we will understand in the types of MF) or may be in both, that surely you don’t have to worry. Suppose we get a return of 2,000 rupees on that, what we gonna do is that we will redistribute it among all 10 investers. Are we going to redistribute complete money? Definitely we also have to feed ourselves, so we will keep the smallest share i.e., 1-3% to ourselves and will give the remaining to you. 

 

The benefits of investing in Mutual fund organisations Is that is handled by professionals and all the burden is on the fund manager and not you.  

 

Familiarizing with the term “stocks”

We all have heard people saying that one should invest in stocks and so on. But what are these stocks exactly? Well, stocks are basically a form of investment which signifies the ownership of a company. And it somehow sees you as company’s asset. It also can be considered as a security deposit which shows that the buyer has fractional ownership in the company which issued that stock. Company often sells their stock to raise capital for its own business. Both company and the buyer are at a win-win situation but a win in the stock market is not always a guarantee in this field. 

 

Relation of stocks with age

Owning a stock has nothing to do with the age of the stock holder. Even students are advised to buy stocks at an early age so that they could start saving for their higher education in advance. For buying a stock you just have meet certain guidelines or criteria issued by the concerned authority and then just have to open a specific account meant for trading of stocks and you are good to go. 

 

If you ever get a chance, take advise from elderly people. They will give you the best advice which comes after years of experience. Most of them are enjoying good returns from stocks at elderly age, which once again make them self-sustainable. 

 

Advantages of owning a stock

Whenever we ask people why did they invest in stock, the most common answer we receive was that it comes with huge returns. Stock investment comes with so many other benefits too. Benefits are one of the main reasons making this market a big hit among people who are looking for options in investment world. Some of the benefits or advantages of stocks are listed below: 

 

1: Return potential is much high-

Stocks of a company are directly linked with the company’s performance, if they sur passes it financial deadline or objectives, then that company is doing good and generating money capital beyond their objective, hence making the share price to go even higher. 

 

2: Splitting up of stocks-

Splitting up of stocks means that if a company’s stock is performing way too good, it is likely to split up thus enabling the stock owner to have the fractional ownership of two company share. Thus, making it definitely a win situation for the stock holders. It also doubles up the return as they now be receiving return from two share. 

 

3: Potential dividents-

Stock market sometimes enables the stock holders to be the dividents of the company. It works like this, if a company has made a fortune and all its operational expenses are met, then it may distribute a fraction of its profit among the share-holders, thus it will bring a huge profit to the stock owners as dividends. 

 

4: Promoting liquidity-

This implies that a stock holder has all the rights to sell the share at any point of time for money and that too via small or negligible transaction loss as compared to the worth of the stock. Getting this money at any point of time by selling the stock is referred to as liquidity. The flow of money is maintained in the market by the sale & purchase of the stocks thus maintaining the liquidity in the market.  

 

 

5: Builds analytical skills-

The stock holder keeps a regular check on the stock tables to infer whether the stock is doing good or not. This regular tally in return not only helps to keep a check on the stock but also enables the holders to build a strong analysis skill.  

 

6: Hassle free-

Buying and selling of stock is not what you see in a regular market, there is a specialized market designed from this type of trade. Selling & buying a stock may seems to be a difficult task but actually is one of the most-easiest tasks ever. You just have to contact a broker or financial consultant or you can even do it on your own. 

 

Best stock market books for beginners

Professionals or financial advisor seldom charge their clients with huge amounts for the knowledge they give. But you may not know, that you can gain that same information for absolutely free via books. We have made a list of such books which will definitely provide an aid in the stock market field. Few of the stock market books for beginners are mentioned below: 

 

1: Stock market investing for beginners-

This book will help the beginners to understand how investments work or what are the fundamentals in making an investment. This book also reminds the readers no to invest everything at a same place but rather diversify your investment. 

 

2: Learn to earn:

A beginner’s guide to the basics of investing and business- This book is truly a masterpiece by the author Peter Lynch & John. This helps the readers to understand that the art of investment in not something which is taught in schools but rather something which is learnt by experience. This is surely one of the best stock market books for beginners which will enlighten the readers of all age.  

 

3: Stock trading:

Invest and trade in the stock market- This is the book written by the author Calvin North which aims to enlighten the readers about the fundamentals of stock market and that too in such a simple or layman’s language. This book is especially designed keeping beginners in mind. This book aims to give the reader the advice you get by paying large fees to financial advisors and consultants. 

 

4: Investing in the stock market for beginners-

This book is written by the author Niel Hoechlin. This book is among the top rankers for the best stock market books for beginners as it gives the readers an insight to the key metrics of investment, basically explaining them when to buy a stock and when to sell one. Along with this, the book enables the readers to know technical analysis of stock market. 

 

Rule#1:

The simple strategy for investing in only 15 minutes per week- This book offers the readers a basic understanding of how one should take decisions in order to succeed in stock market. One don’t need to have a rich background or immense knowledge, with basic knowledge through this book author Phil explained it how to achieve it. 

 

The intelligent investor-

This book is written by the author Benjamin Graham, the book explains a beautiful journey from minimal loss to maximum profits. The valuable lessons mentioned in this book will surely be of great use among the newcomers. 

 

How to make money in stocks-

This book helps the readers to find the winning stock and help to increase their analytical skills. This book written by William Neil is a masterpiece and a bestseller among the society. 

 

When to sell-

This is a book written by Justin Mamis, who beautifully explains enormous lessons one should keep in mind while selling the stock. This book also highlights the fact that everyone was once a beginner. 

 

Irrational exuberance-

This book is written by a very renowned economist Robert J Shiller. The book aims to tell the importance of patience and determination. It narrates a story about how a stock can boost up within no time, one just need to be patient and careful. It also describes the boom of stock market which took place in 1995 and it is on expansion ever since.  

 

Stock investment for dummies-

As the title suggest this is one of the best stock market books for beginners as it explains all the basic concept one must keep in mid in order to make a firm foundation. The book also explains how technological evolution plays a major role in stock market. The book finds all the readers as a newbie and take them on a journey of stock market from basic analysis and math to the master level stock market techniques. Every beginner must start with this book. 

 

Disadvantages of owning a stock

The grass is not always green in your garden, similar is the case in stock market where there are risks of losing. Stocks often goes up and down which implies sometimes it may come out to be beneficial or either you end up losing money. Various possible risks in the stock market are listed below: 

 

Losing the investment-

It is possible in the stock market that you may end up losing all your investment. This happens rarely and only when the company is not at all performing well or is on the verge of extinction. 

 

Significance of time-

Some people buy stocks on their own which is a good thing but then most people are not able to figure the right time to sell or buy stocks and ends up losing the capital amount. Thus, if you are planning to buy stocks either consult a broker or research the company thoroughly then only go for it. 

 

Professionals in the field-

Few of the stock holders are not normal investors like us, they often has a career in this field and understands each and every move of the market. They are well practiced with its up and downs, hence with greater knowledge and skills make more profit than the normal investors.  

 

Do’s and Don’ts

There is a whole long list of things that you should follow or do in the stock market along with the things you must not. We have made a list of few such things, so let us throw some light on them: 

 

1: Stick to your plan-

Always stick to your plan, don’t become desperate for quick returns and buy new stocks. Research them properly then only make a call. Never take decision in a hurry. 

 

2: Dump the junk-

Always remember to sell the right stock at a right time, and if a stock is not showing substantial improvement, don’t wait for a right time, sell it then and there itself because it is noticed that if a share is on long decrement, it may not give good returns. 

 

3: Ignoring the expense-

The key rule in stock market is you have to pay some capital to the financial consultant or the broker, never ever forget this rule and invest in such a stock where the expense is much higher than the return expected. 

 

4: Research well-

before making an investment one should thoroughly research the stocks he or she might be investing in. because no one can give you a 100% surety of return.

 

5: Believe yourself-

After analyzing properly, you decide to invest in a particular stock, stick to it. It might not give you return quickly but you have to be patient. You have to trust yourself that you made the right choice by investing in this stock.> 

 

Don’t only see the pattern-

Many people only chase performance of a particular stock and sometimes even guess the outcome but it differs in reality. Because if a stock is doing good, people often take it as the right time to sell it, they might be wrong because selling off the stocks somehow contributes to lowering of the stakes. 

 

7: One should never panic-

one of the most common problems faced by the investors. When they see their stocks are not performing well, they quickly make up their minds to sell it in order to minimize the loss but in reality this loss could totally be avoided just by simply sticking to the stocks for a bit longer. As the stock market keeps one changing, one has to be patient and determined. 

 

CONCLUSION:

In this article we discussed almost each and every aspect of stock market which is to be considered while making an investment in it. In order to succeed anywhere, let it be stock market or life, one has to be determined and patient. Start by making small investments and then gradually level up. Though stock market is full of risk and insecurity, but as they say “greater the risk, higher the profit”. Think and analyze before investing and you are all set to put your first step in the stock market. 

 

While growing old, the most important question is “Are we financially secured?” If you are not sure about the answer then you must consider investment in stock market as one of the favourable options. If you have any query or need answers to your questions, do reach us out, we are more than happy to help. We at Emoha aims to help each and every person in need and feel immense satisfaction by making your lives more comfortable. 

 

Get in touch with us now at eldersfirst@emoha.com or call us at 1800-123-445555.

 

schema

.