first time investors ... start here !

so you have heard about stories how a certain friend doubled his money in a month. read people screaming on business channels. seen sensex hitting 20000 being celebrated as diwali. and still do not know how to begin.

my friend, you are not alone. there are lots like you, even i was. i will try to make things simple for you.

so how do we begin ...

1st and foremost, get yourself a Income Tax PAN card, proof of residence and a normal bank account. if you have all of these, move to next step.

2nd, move your lazy bum and make a call to icicidirect to open a demat account ! no i do not get any commission from them. i strongly recommend icici direct as they have the most novice friendly platform.

once you call them, these guys are after you literally to get your account created. so make that first call to them.

just in case you are wondering what a demat account is, its an account where in you hold you shares just like you hold your money in a bank account. some time back, shares used to be physical paper and that led to a lot of issues like fraud share certificates, paper getting torn, burnt, lost, etc etc. that is when it was decided to "de-materialise" the share certificates into an electronic form and hence the name, "demat" :)

if you are reading this, you are doing well !

3rd, if you have a PAN card, it should take 2 weeks to open your demat account, if not it might take 4-6 weeks to get PAN and demat.

4th, you do not need lakhs and lakhs of rupee to get started ! a small sum of Rs 5000-10000 is good. keep this money aside as something you do not mind loosing. i am not discouraging you here. go with the mindset, its ok if you lose this money. trust me, this mindset makes a lot of difference.

alright ! so now you have what it takes to start your first trade !

how do i know what to buy ?

guys, let me make a confession here ! i was drawn to the markets for lure of easy money. how wrong was i, the sooner you realise this the better.

the first step is often the toughest, so the sooner you take it the better. follow the market for few days. no i am not asking you to get glued on to CNBC yet ! follow means, check a couple of times in the day as to what levels the sensex is on.

choose a day when the sensex is down ! yes down (its not a typo error) ! let me ask you, when do you like to buy stuff from a mall ? whenever there is a sale going on, right ? same applies to stocks. buy on a day, when there is a small "correction" or dip.

i would strongly recommend one of the following stocks as your first trade. icici bank, reliance industries, ntpc, sbi, ongc, hdfc and reliance communication.

do not let the number of stocks you get for your money deter you ! if you are buying reliance industry and all you want to invest is 5000, you will only manage to buy 1 stock of reliance.

there you are ! you have made a grand entry to the stock markets. don't be afraid and start to panic, if you see your stock price go down the very next moment you buy it. also, do not put all your money at on shot. space it out over days and weeks !

after you have invested all your "starting capital" forget them for 3-4 months, ok ... if that's tough to do, check it once a day, no more :)

the rest as they say, will be history ! all the best, make that first call to open your account :)