Have you ever thought of investing in big companies such as John Keels Holdings, LOLC, Carson’s etc, do you think it is not possible? You are wrong If your answer is yes, investing in all big companies is possible, thanks to the Colombo stock exchange, investing in all major players in the country is possible and investing in share market literally makes you one of the owners of the company you invest in. lets look at How to invest in share market
Once upon a time, after the war victory, srilankan stock market was the highest performing stock exchange in the world and everyone spoke about it and invested in the stock market, however, due to various reasons Colombo stock exchange performance came to a balanced situation and I believe that this is the reliable and most suitable time to start investing in the Colombo stock exchange.
The Stock market is an ocean and it’s not possible to learn every aspect of its components and how it is operating, if you are going to take a decision of “I am going to study everything about the stock exchange, then I will start investing” then you are not going to invest as it’s not possible to study the entire stock market. I recommend to start with a small amount and learn investing without burning big amount.
The Colombo Stock Exchange (CSE) has 295 companies representing 20 business sectors as at 31st January 2017, with a Market Capitalization of Rs. 2,701.6 Bn.
These are the simple steps to start investing in the big corporate’s in Sri Lanka.
Find a Stock broker of your preference and convenience
You should have a stock broker to buy and sell shares in the Colombo stock exchange, there is approx. 20 registered stock broker firms available and find a stock broker who will provide you valuable insights about the share market movement. A stock broker will play the intermediary role between you and the stock exchange. Make sure to do a small research about the stock broker, online trading and daily, weekly research insights are much required to start as a new bee.
To find information about stock brokers: http://www.cse.lk/home/tradingMembers
Open your Trading account and CDS Account
Nothing to worry about, just fill in the application forms and submit to your stock broker, they will do the needful.
Start investing with small amount
You are all set to start buying and selling shares Once your accounts are active, don’t be in a hurry to buy and sell shares, select few companies and invest a small amount and observe, most of the stock brokers will advise you to use the online trading, or you can call your stock broker and ask them to buy or sell your preferred share.
Learn the basics while you invest
Don’t be greedy to get immediate returns from your share investments, there are day traders and there are investors, day traders used to buy and sell within short period as the prices fluctuate and investors will observe the condition and the potential of the stocks. Day trading is riskier and investing is ideal for the current context. Spend your time in studying the patterns of the stocks and understand the market risk. Remember, don’t burn your finger by investing all your savings in stock market. Patients will bring you rewards, start increasing your investment in strong companies when you think you have acquired sufficient knowledge.
What is the alternative you have?
if you are afraid to start investing on your own, you can go with a unit trust to manage your investments. Unit trust companies are a professional fund management companies, they wil pool your funds with other investors fund and invest in various stocks as a portfolio investment. The advantage of unit trust is they are professionals and they know all the market techniques to minimize your risk, but you will not have any control over your investment.
I must quickly remind you that this is a simple guide to start investing in share market and you have to learn a lot to master the art of investing in stocks. You have to learn about different type of boards, different types of indices and different types of stocks. But, starting is important and the little information I provided above is sufficient enough to start and roll.
Visit : www.cse.lk for more information and resources.
Disclaimer: The information contained in this article is for informational purposes only, should not be considered as an investment advice. Always make sure to do your own research, talk to your financial advisor and/or seek independent advice where appropriate & necessary.