Sunday, June 8, 2014

How to learn investing without being really putting money in stock?

Say you are a student and expecting to go to work soon or you are expecting some money. You want to invest that money in stocks for long term so that the money can grow. But you are afraid of loosing the money since you have no knowledge of stocks. We learn games by playing, we learn dance by dancing. So in life we learn everything by actually doing, remember when you rode cycling for the first time, and stock investing also no different.   There is a chance of losing the money if invested in wrong stocks.

In the beginning stages of investing, for many of us, it is more of a emotional game. People often try to prove to their friends, spouses or colleagues that they can make money in investing. They just treat investing like gambling and put everything in one basket expecting huge returns. People do not want to wait to gain investing knowledge. That is why many investors lose money in the beginning stages. We call successful people in their profession as practitioners.To make money in stock market you have to learn and become a practitioners.

Unlike yester years there is lot of information available for those who really want to learn the art of investing. It is always better to start with small money and getting used to the nuances of buying, holding and selling stocks. Since investing in stocks is so risky, is there a way to learn investing without really putting money in stocks? People say  playing games like Monopoly improve the investing acumen. Warren Buffet and Bill Gates play Bridge. But do they play Bridge to improve their investing acumen? Is there a way to improve investing skills without being putting real money in stock? Yes.Now a days many brokerages offer guest accounts which you can trade with virtual money.

Investopedia  offers virtual trading simulator. Also   Indiabulls, Moneybhai,  Dalal street, Chicago mercantile exchange, Android Apps offer games to practice stock trading. Bombay stock exchange(BSE) training institute also offer simulation game. Many trading accounts such as Axis direct offer guest accounts to learn stock trade. Prospective investors can also create dummy portfolios in Yahoo finance, Google finance and Money control

Regularly reading business and finance news and articles help to accumulate knowledge.  These preparation help to reduce risk. Most of the times risk comes from not knowing. If you know how to reduce risks then you are on your way to be a better investor.To enjoy fruits in future we have to plant the seed today. Warren Buffett said "You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right." We have to always invest on knowledge and based on reasoning.

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