What is the minimum amount one needs to invest in the Indian stock market?

This happens to be one of the most frequently asked questions by beginners. They want to know as what is the minimum amount with which they can start their investment in the stock market. The question is apt. When the stocks are available at as less as Rs. 10 and the stocks of some of the big companies like Reliance Communication, IDBI Bank, Bombay Dyeing, Idea Cellular, Tata Power etc., fall within the price rate of Rs. 100, you can start your investment with any amount somewhere between 100 to 1000 or even more.

Start Small to Learn the Process

It is always advisable for a beginner to start with a lesser amount and trade cautiously. It is all about learning the tricks of the trade initially. Once you get yourself a bit acquainted with ways with which the stock market functions, you can take calculated risks and invest more.

Suppose you buy stocks of Rs. 1000 of a certain company listed under BSE or NSE, and end up making profit at the end of the day after the sale of the stocks. You should be happy as your homework and calculated risks paid off. In case, the things don’t go your way and you suffer a loss, you shouldn’t get disappointed either. Consider it as a learning experience. And since the amount is very less, it is not making a big hole in your pocket. The idea here is to learn how to play safe, until you have mastered the art.

Consistency - The Key to Success

For new investors, it’s about making an investment portfolio. Consistency is the key to success. A continuous investment for 3 to 4 months would give you a great deal of knowledge and teach valuable lessons. When you make some real good profit within a few months of your learning phase, you shouldn’t be lured by it. You shouldn’t make a huge investment and risk it all. Instead, you should continue making steady slow investment.

You also need to keep in your mind the additional expense that will come along in the form of charges while buying a stock. Such as transaction charge (usually less than 1%), Service charge, brokerage, etc. So, it is going to be the amount needed to buy stocks plus the additional charges that you have to bear.

Conclusion

There is nothing as fixed or minimum amount to start an investment in the stock market. It all depends on the investor’s willingness, comfort and the risk taking ability to make an investment of certain amount. But as a thumb rule, beginners are advised to make investments with a lesser amount and grow as wise investors.

At Indra Securities, we provide training to budding traders and investors. Our years of expertise and invaluable advice help you make wise trading and investing decisions. You can also open a Demat account with us and enjoy all time quality services with low brokerage.