What is the Lowest Amount We Can Invest in Share Market
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Stock markets are always enticing and this might be the reason why a large number of people are investing their hard-earned money in the stock market to make quick gains. For newbies, it becomes difficult to determine the lowest amount we can invest in share market to start making profit. Essentially, they are willing to trade in stock markets but they have no clue on what amount they should invest in.
If you are among then want to know the minimum amount one should invest in the stock markets, this post is meant for you. Here you will get to know how much money you basically require and what is the minimum limit of amount to invest in the share market.
Minimum Amount Required To Invest in Stock Market
Truthfully, there is no such limit on the Lowest Amount We Can Invest you should trade in the stock market. Even if you have only 10 Rs, you can use the same for stock trading.
This is certainly the best part of the Indian stock market. The minimum amount depends on the particular stock you are interested to invest or trade. Both Indian stock exchanges – BSE and NSE boast of a large number of stocks that have a price value of Rs. 10 and below. There is no need for you to get lakhs or thousands just to get into stock trading. According to the top stock brokers in India, you can trade with any amount and invest in stocks that can be bought using the same amount. So, there is no lowest amount we can invest to start stock trading at present.
For your reference, below is a list of a few corporations whose stock prices are less than Rs 100.
Organization Industry Market Cap Existing Price
Indian Overseas Bank Public Sector Bank 27449.77 16.7
NHPC Ltd. Power Generation/Distribution 24208.53 24.1
Union Bank of India Public Sector Bank 22552.09 35.2
Bank of India Public Sector Bank 22479.69 68.6
Bharat Heavy Electricals Ltd. Engineering 17445.14 50.1
The Federal Bank Ltd. Private Sector Bank 15998.81 80.15
GMR Infrastructure Ltd. Engineering 15814.18 26.2
JSW Energy Ltd. Power Generation/Distribution 13618.7 82.9
UCO Bank Public Sector Bank 13558.37 13.67
Bank of Maharashtra Public Sector Bank 13481.13 20.55
Central Bank of India Public Sector Bank 10546.63 17.95
From the above table, it is clear that there are various stock in BSE and NSE that can trade at much lower price. So, if you think that you need a fortune to trade in the stock market, it is absolutely wrong.
Appropriate amount for beginners to start with
The next big thing is that what is the right amount for a person to trade in stocks.
A quick answer is that if you are a beginner in the stock trading and want to learn more, it always suggested to start small. Invest as less as you can and keep on grasping more. Any amount between Rs 500- Rs 2,000 considered enough for beginners to trade. In the initial stage of stock trade, you won’t love to lose a huge sum of money by trading in the wrong stocks. This is why it recommend to stay low to stay safe. Once you get a better hold of stock trading, you can gradually increase the investment amount.
According to the best stock broker in India, for beginners, it is best to follow the following 2 rules.
100 Minus your age rule
There is a prevalent equation with respect to how much one should invest in the stock market and popularly called the ‘100 minus your age rule’. The decree grounded on the attitude of progressively plummeting the risk when again. The rule can understood like this. ‘The %age of the stock sticking to your net worth must be equivalent to 100 minus the age.’
For instance, if your age is 30 and the total savings to date is Rs 10,000. So, the amount that you can choose to invest in the stock market should be (100-30) = 70% of your total net value. In other terms, a person can invest Rs 7000 in the stock market at the age of 30 and with savings of Rs. 10000.
The X/3 Rule of Investing
Another widely used system for novices to mitigate risk while investing is X/3 rule. According to this rule, one should invest only x/3 amount initially if x is the total money you plan to invest in a particular stock. After some time, you can invest your next x/3 amount in the stock if the performance is satisfying. And lastly, the remaining x/3 can invested after another few months.
The Verdict
If you are among those who have a query about ‘What is the lowest amount we can invest in stock trading?’ the most appropriate is that there isn’t minimum cap on the amount you should being stock trading in India. Any amount that you can easily afford is enough for the stock market. So, don’t take the pressure and being gradually with any amount in the stock markets. The more you learn, the better profits you can make later. So, focus on understanding the secrets and tactics of stock market investing rather than worrying over the minimum amount to invest initially.
