How can I know completely about stock markets?

“ Learning to Learn from experience is the best way to gain knowledge of anything.”

The above statement rightly encapsulates the story of better and wholesome learning.

Learning everything about any topic will be a very long shot. You can only learn up to a certain extent, and after that, it is the experience that is your best teacher and you will learn when you invest either directly in the market or through experimenting trials like paper trading/paper investing.

Moreover, the steps or ways of learning will depend a lot on your current level of knowledge and experience. The same way cannot be prescribed for someone who is completely new to the market and want to start from the beginning and for one who has good experience in the market but wants to gain more experience for better results.

There is also a very large set of people who have gained sufficient book knowledge about the stock market and investment by knowing about financial topics, fundamental analysis, ratio analysis, valuation, and other information, but lack the knowledge of application, i.e. how can the learning be converted into actual results.

Therefore we will take a look at some basic steps that can be taken by people of each group to gain sufficient knowledge about the stock market so that they are not only safe from making huge losses but also confident to manage their finances. Aware and informed investors make intelligent decisions about their finances. They lose less money and make a great return. These returns, of course, translate to higher income and consequently more demand in the future.

This higher demand leads to higher output for the industries, which in turn improved the sales and profit potential of the industries and more gains for investors. As companies make more profit, more affordable products are launched and more people are able to get access to basic commodities,

Moreover with a higher number of investors and greater capital inflows which they bring in, gets invested into businesses. More businesses get access to sufficient capital. This leads to ease of doing business, greater access to capital, more flourished businesses giving new and improved products, generate more employment, and lead to national development.

It may seem a bit exaggerated, but no doubt greater and better financial inclusion has the ability to bring such transformative change in society. It was critical to understand the importance of Financial learning before turning to know-how can learn it.

Now we will look at each group of people and see what can be the best way they can themselves financially aware or learn about stock markets.

Beginners/New to Stock Market and finance

We will divide this category into two parts for a more practical solution.

If you are a student, who is inclined towards the stock market and wants to know more about the market, it is best the time and platform for you to take a correct and informed decision to learn the process. You can choose the subject as your field of study and within a few years, you can gain great knowledge about the subject.

But always focus on more practical knowledge. Try to get involved in live projects, practical and real analysis, undertake research on basis of what you have learned in order to gain maximum out of the learning opportunity, as it is one of the great opportunity to learn, where you can make mistakes, it will be corrected and you will have time to learn and do practical experience side by side and learn the subject in a more holistic manner.

If you are a professional in a different field or a student from a different stream or specialization, you will need to put in disciplined and concentrates effort that is needed to learn any subject in a shorter time span with regular work. You can start either with some basic books explaining basic accountancy, company structure, it’s functioning financial statements of a company. Follow it by following daily financial and economy-related news.

Try to link it with what you have learned and see if the forecasted impact was direct or not. Why it was incorrect and learn from experience. Follow the company results, read company announcements, and gain an edge over at least a few sectors you understand well or are currently involved in.

Follow it by either self-learning through books of then the specific topic of interest, or the topic you seem to have a good grasp like Value investing, Relative valuation, trading techniques, etc. and after you gain near expertise in that field can move to learn further concepts. If it seems more grinding, you can start with a suitable stock market course which will give a good head start and then you can follow these steps and you will understand from books and news more quickly and better way.   

One with intermediate knowledge/ Limited practical experience and want to learn more

For such people, you should first identify your strengths and weaknesses. What are your strong points and which type of analysis you are able to perform with better accuracy and greater confidence? Which are ether industries and sectors you understand well and have better predicting the future prospects of the constituent companies.

Identifying it will help you know what further steps to take and how to improve your learning and skills. You can start to focus more on your string skill, like trading, or value investing or qualitative analysis or ratio analysis, etc., build your competency in that and then move to other related steps one by one to gain more advantage.

Identify your preferred industry focus on it in the initial phase and then move to other sectors, rather than looking at all from starting and losing your competitive advantage in that industry too.

Learning of the stock market is not a complex process, but needs good discipline and a greater understanding and observation of market events, certain market awareness, and problem-solving ability to gain mastery.

You can learn up to a certain extent through these steps. For a more holistic and greater practical understanding, as said earlier, it should be coupled with actual real market experience. As along with knowledge, other practices like the control of emotions, portfolio management, and protection from frauds and malpractices also play an important role in actual realized returns and they can be gained from experience only.

So dedication to learning, discipline, listed steps, and experience can help you learn the stock market in a more efficient and holistic manner.