Investing had been a great venture. Today, there are veterans that recorded their experience and expertise in the books for us to learn from. Warren Buffett once said, “I always knew I was going to be rich. I don’t think I ever doubted it for a minute” Long way for us to land on the mindset of such an experienced investor, so here we begin understanding the difference between active and passive investing.
- Active investing: The very popular style of investing today. Active investing has you completely give the authority to a fund manager, who with his knowledge, skills and experience decides and manages your stocks.
- Passive investing: There is no fund manager in passive investing. You are solely responsible to manage your own stocks. Your research, analysis, and experience matters to a great extent. One can always jump from active investing to passive investing.
Okay now that the investing styles are understood, let’s explore a little more in kinds of investment in the stock market.
- Individual stocks: Individuals stocks are the way where an investor as an individual evaluates stocks and invests in stocks further. One can easily invest in individual stocks. Only the conditions to address are thorough research, deep analysis, comparing, share market apps, and various other mathematical calculations. Since you are a beginner it is highly recommended to start your individual stocks journey with stock market apps (active investing). Though if all of this seems a little haywire and confusing, there are always other options to adhere to.
- Index Funds: Index funds are counted as the world’s biggest mutual funds. Many investors are unaware of these funds and those who are aware would still prefer to actively invest. In index funds, you as an investor would be aiming for returns as that of the returns of the indices. Now, what is an index? NIFTY, SENSEX & S&P 500 are major indices that investors dwell in. In the stock market today, NIFTY is an index that comes from 50 Indian companies, and SENSEX comes from 30. S&P 500 (index from 500 US-based companies) is the biggest index to keep track of. Index funds are essentially lower in costs and usually match the long-term performances of their indices.
- Robo-advisors: The new talk on the shoulders of every investor today is the Robo-advisors. Today if you would search “share market apps India” you would land on numerous Robo-advisors. Best believe it, today this is the best method to start investing. Essentially a Robo-advisors guides with what stocks & caps to invest in. Tailored to your suitability and preferences of risks, apps like this are booming in recent years. Moreover, you get notified with updates, articles, blogs & podcasts on a varied range of topics like IPO to veteran large caps.
Today we have got a backup knowledge of investment from all around the world. It has become more thrilling and convenient to fund in stocks and even in an IPO.