Last Updated on May 31, 2022 by
Making money from stock market is one of the easiest thing because it does not require a higher level of hard work or efforts input. For that reason even a beginner can make money easily without any hassle.
So there are four ways through which you can make money from stock market they are
- Intraday trading
- Short term investing
- Long term investing
- Buy and hold.
Buying and selling of stocks on the same day is termed as intraday trading. it is one of the most preferred way through which a trader makes his profit out of stock market.
So now, the actual question is how do you make money from stock market? the simple answer is buying stocks at lower price and selling them at higher price on the same day can helps you to make money from stock market. Sometimes many traders also do a vice-a-versa scenario of the same startegy i.e. they used to buy stocks at higher price and sell them at lower price here it is termed as short-selling. it is also a profitable way that helps trader to make profit from stock market.
Short term investing
Short term investing initially refers to buying a stock and holding it for less than 1 year till the stock price reached to a definite limit. this type of trading is mostly preferred by swing traders, momentum traders, beginners, etc.
So, how do you make money from this option? as it is one of the best likely way through which beginners used to make money from market. they actually buy the stocks at current market price (cmp) and hold it in their demat account, till the price of that stock reached to a desired position of the stockholder.
Long term investing
Investing in stock market for getting higher profits in form of dividends, capital gains and through other factors and ultimately holding the positions in demat account for more than 1 year is termed as long term investing.
It is one of the best option preferred by ethical investors to the beginners. investing in stock market for long term would be helpful as the investor can get benefits like dividends, bonus shares if company declares, higher dividends due to stock splits and other voting and legal rights.
Buy and hold
Buying a stock and not even thinking to sell it is the best way to make wealth from stocks, the best example for this kind of investing is “warren buffet“. according to him “if you buy a stock of company by making proper research and fundamental analysis, then the best time to sell that stock is almost never“.
So how do you actually make money from this option, you just have to analyse and select a list of good stocks on the basis of their financials, future prospects, company’s management, etc and invest the fund in it. and year over year (YOY) you can get to see the magic of compounding which helps your investment to grow in a disastrous way.
Can stocks make you rich?
Yes, stock helps you to become rich and helps you to grow your investment very disastrously, there are so many investors who’ve made their wealth by investing in stock market. “rakesh jhunjhunwala” and “harshad mehta” are the two known big bulls of stock market in india. Even from foreign countries there are list of investors who’ve made their complete wealth from investing in stock market. the two well known investors among them are “berkshire hathaway’s warren buffet” and “benjamin graham“.
So, how do you become rich with the help of this instrument, by following the value and ethical investing tips to select best shares that have higher potential to grow in future, you might also have chances to create a good wealth and become rich in future.
Here, compounding plays the vital role to make you rich, when you buy the stocks of company and hold it for longer time then the power compounding helps your investment to grow differently, for an example if you have a bank account or if you started a fixed deposit then you can get a fixed rate of interest which is getting calculated on simple interest basis, it means you can get a fixed rate of interest every year, but if you invest in stock market than you have potential of getting compound interest, i.e. you can get the interest on capital investment as well as the previous interest received. you may see very minor changes in short term but in long run the growth of wealth would be extraordinary.
How do beginners make money in the stock market?
Trading and investing are two major options through which a beginner make money from the stock market. among these two options trading is most likely to be chosen by the newbie traders or beginners as they were not aware about market risks and other factors,
However even with such risks many beginners also make profit out of stock market by doing intraday or by investing in futures and options. rather than that the another option is of investing which is selected by very few beginners who were aware about the market risks and fluctuations. Making money through value investing is a quite simple option as the market fluctuation does not affects the investor directly because he hold the positions for longer time. it helps to create a good wealth through capital investment and other than that dividends and bonus shares are the secondary income sources through the capital invested amount.
Best stocks to make money fast.
There are more than 5000 companies stocks are listed in the stock market among which some stocks are getting traded at overvalued price that is their higher potential limit and some are getting traded as undervalued stocks which might have higher potential in future.
These undervalued penny stocks might helps a trader to make money fast. the best example to see an insight of penny stock is titan company. before 2000, it was a penny stock which have very low market capitalization with higher debt and other cons in the company. But year over year it had managed the balance of the company and bring the company financials into a good reach. rakesh jhunjhunwala is one of the well known investor who’ve made a high percentage of his wealth from titan company stocks.
So, a list of stocks that helps you to make money fast as a trader are,
- shriram transport finance co.
- rbl bank
- bandhan bank
- bharti airtel
- icici bank
- tata steel
- zee entertainment
- indiabulls housing finance
- state bank of india
- axis bank
- vodafone idea
- indusind bank
- jindal steel & power
- bajaj finance
- tata motors.
Investing in stock market and making money from stock market is sometimes not an easy task as it incurs heavy risk sometimes, so it would be preferable to invest the extra money that you have. analyzing company’s fundamentals and financials before investing in company’s stocks and taking very low or measurable risk is always recommended as stock market is subject to market risk, that’s why it is very difficult to predict the market fluctuations and upcoming trends of market.
Read More: A Guide On Price Action Patterns in Stock Trading