How to Invest in the Indian Stock Market

Register with a stockbroker or investment firm with ties to the Indian stock market. The defining factor when hiring financial assistance is experience with the market in which you invest your money. Stockbrokers can be costly, but they tend to respond quickly to queries about individual stocks.
Examine the BSE 200 index to determine the strength of your investments in India. This index covers the 200 best-performing businesses in India on a daily basis. Look at individual businesses in your favored industrial sector to assess the wisdom of potential investments.
Go out on a limb with a technology stock through the BSE TECk index. The Indian economy features a rapidly expanding biotechnology and computer-development sector that has been a boon to investors. Past success should be taken with a grain of salt, however, because similar growth in the United States in the 1990s resulted in lost profits for investors.
Locate growing companies with small amounts of capital through the BSE Small-Cap Index. This index features hundreds of young companies with low funding that are looking for investors to take them to the next level. You can invest in a company at a cheap share price without a great deal of risk.
Track the progress of your stocks online with the Bombay Stock Exchange's commitment to quick updates. The BSE index transmits information to local brokers, international websites and business-television networks every 15 seconds.
Spend your investment dollars wisely as you invest in the Bankex index. This index tracks the progress of India's top 12 banks and allows you to make an investment in their growth.

How to Find Good Stock Investment Ideas

Check out the following websites: Yahoo Finance, MSN Money and Stockpickr. All of these sites have some great information for stock investment ideas. On Yahoo Finance, take a look under the Investment tab and 'Education;' On MSN Money, go to the Investing tab then 'Stock Research' on the left hand column. Also, MSN Money publishes what they call 'Expert Picks.' This is basically a handful of investing experts who make recommendations for stocks and publish them free of charge. These expert picks can sometimes be very useful and lead to good investments, however I would not base your whole portfolio around them.
Go to www.MotleyFool.com. This website has probably some of the best information for independent investors. The website is a massive community of expert and amateur investors looking to share their own knowledge and make sound stock picks. When looking up stocks on this site, you not only get basic information about the company, but you can also see who is recommending the stock and if they are Bullish or Bearish on it. There is also something called CAPS, which is a rating system for specific stocks. If the stock has 5 stars, then it may be a golden investment opportunity. You can also see a list all of the stocks on the website that have gained the golden-clad 5 star rating.
If your really serious about making some money and finding profitable stocks, you can purchase MotleyFool.com's 'Premium Services.' A team of expert investment advisers will publish stock recommendations and sell them for a moderate price. According to the website, these stock recommendations have earned investors very high returns year after year. The site's most popular service is the Stock Advisor. It's a $199 per year newsletter that is currently earning investors around a 41% yearly return...Not Bad.
Also consider buying paid research services from websites such as Zacks.com. They publish expert picks on stocks they think will rise in the market. Be very careful when looking at these websites, though. Some sites say they are selling stock picks, but will often make exaggerated claims on how much money you could make. Sometimes these stocks are very speculative and risky (i.e. penny stocks).
Watch investing shows on MSNBC and CNBC such as Mad Money with Jim Cramer. Some people criticize these shows for the lack of accuracy of their stock picks. However for a new investor, these can give some good ideas for stock investments. From there, you can do some of your own research.
Look for booming industries or companies. A simple way to get great stocks ideas, is to look for the companies or industries that are up-and-coming or making huge trends in the market. If you think an industry sector is going to shoot up over the next few years (i.e. Alternative Energy sector), then buy some stock for companies in that industry (i.e. buy solar energy stocks!). Also, look at the fundamentals of a company. If you think a company is going to be profitable and have a good balance sheet, then consider buying their stock. A good example of this is Apple; excellent products combined with good company leadership and earnings lead this company's stock to almost $200/share in 2008.

How to Buy Stock as Gifts For Children (4 Steps)

Decide how to invest in or buy the shares of stock you are planning to give. The easiest and most financial efficient way to buy stocks for children as gifts is through Dividend Reinvestment Plans, or DRIPs. Many companies accept direct investments from anyone who wants to invest. This means that you can invest without going through a broker and without paying high fees and commission. Once you buy the first share for the child, anyone can continue adding to the account by buying more shares. The dividends earned by the shares of stock can be automatically reinvested to buy more.
Decide how to invest in the DRIP. Contact the individual companies via their Investor Relations department and ask if you can purchase shares of stock directly. Alternately, use a DRIP service company, which requires the child's Social Security number and the creation of a custodial account.
Choose a company in which to invest, which often means buying stocks with which you are familiar. Remember a child has a long-term horizon for investing. Buy shares in companies that offer growth over the long-term. Typically, growth companies don't pay dividends, or pay only a minimal amount. Income stocks pay dividends, but may not experience as much growth.
Buy the share of stock as a gift for your child, grandchild, niece or nephew. If you decide to buy directly from a company, you will receive a statement from the company representing the purchase. If you buy from a DRIP service company, you'll receive a statement with the purchased shares held in the custodial account.

How to Calculate a Common Stock Required Rate of Return

Determine a stock's beta, a measure of its market risk. A beta of 1 means the stock has the same risk as the overall market, while a beta greater than 1 means the stock has more risk than the market. You can find a stock's beta in the quote section of a financial website that provides stock quotes. For example, use a stock's beta of 1.2.
Determine the market's risk-free rate of return---the return you can earn on an investment with zero risk. Use the current yield on U.S. treasury bills. The U.S. government guarantees these investments, which makes them virtually risk-free. You can find treasury yields widely published on financial websites or the business section of a newspaper. For example, use a risk-free rate of 1.5 percent.
Estimate the market risk premium, the excess return stock investors require over the risk-free rate of return for taking on the risk of investing in stocks. Subtract the risk-free rate of return from the expected return of the overall stock market to calculate the risk premium. For example, if you expect the overall market to generate 10 percent returns over the next year, subtract the 1.5 percent risk-free rate, or 0.015, from 10 percent, or 0.1. This equals a market risk premium of 0.085, or 8.5 percent.
Substitute the values into the CAPM equation, Er = Rf + (B x Rp). In the equation, 'Er' represents the stock's expected return; 'Rf' represents the risk-free rate; 'B' represents beta; and 'Rp' represents the market risk premium. In the example, the CAPM equation is Er = 0.015 + (1.2 x 0.085).
Multiply beta by the market risk premium and add the result to the risk-free rate to calculate the stock's expected return. For example, multiply 1.2 by 0.085, which equals 0.102. Add this to 0.015, which equals 0.117, or an 11.7 percent required rate of return.

How to Choose a Stock Broker (10 Steps)

Build a list of potential brokers. Many names are part of the culture. Take Merrill Lynch and TD Ameritrade, two well known companies. One gives full service the other discount. Choose a name with a good history. Read the reviews for stock brokers at the consumersearch website.
Compare minimum cash needed to open an account. This varies from several hundred to several thousand dollars. Analyze your personal financial situation and how much money you have to put upfront.
Determine the type of investments you want to make. Stocks, mutual funds, bonds, options are some main choices. Look at your potential list to see which company offers the right investment vehicles.
Pick a full service broker. Their service costs more but for the most part leaves investment decisions with the broker. See the customer ratings before you apply. Merrill Lynch, Morgan Stanley and UBS are a few of the big names. See the annual full-service rankings at the smartmoney website.
Choose a discount broker. Make your own investment decisions with a discount online broker. Save money on commissions and fees. Look at the big names and compare, such as TD Ameritrade, E-Trade and Scottrade.
See how much each stock order costs. Online trades are less expensive. A broker assisted trade is much higher per transaction.
Check out additional fees. These range from inactivity fees to maintenance fees. Each stock broker will list their fees and all have websites containing this information.
Think about the services you want. Level II quotes, interactive charts, streaming news, check writing and research are good tools for the investor.
Look at local office locations. Make sure an office is reasonably near your home, more so with a full service broker.
Talk to your potential broker on the phone. Prepare questions in advance and get a feel for the person. Choose a firm that you can rely on and trust.

How to Make Your First Stock Market Investment

Start researching before you even think of making your first stock market investment. Buying and selling stocks, bonds, options and other securities is not a game. Once you lose your money, it is gone and there are no guarantees of ever getting it back. As a beginning investor, you need to educate yourself as much as possible before that first trade is ever placed. If you are looking for assistance, considering purchasing a book or research investments online as a place to get started.
Sign up for a low-cost online discount broker if you don't already have one. To make any kind of stock market investment, you must complete your transaction through a broker. You can choose to sign up for a traditional brokerage account; however, it will be much cheaper trading online. If you are concerned about placing your own trades, make sure you pick a broker that offers assistance in buying and selling securities.
Set aside a portion of your savings to be allocated to your investment portfolio. Be sure to start out small, especially when making your first stock market investment. Remember that this is not play money you are dealing with. It is your real hard-earned savings that you want to try and leverage to make money, not lose it. Also be sure that you don't already have this money allocated to cover your monthly payments. This account should be treated as expendable.
Decide on what types of securities you are interested in trading. There are numerous types of stock market investments that can be placed, other than stocks. Mutual funds, ETFs and stock options are just a few of the other investment choices. The most popular investment option is investing in stocks. Remember to make sure you research all types of investment styles you are interested in before investing.
Continue to research different securities as you get closer to making your first stock market investment. This is a step that you should keep doing, even after you make your first investment purchase. Stocks and other investments move up and down based on market conditions, as well as the overall health of the company. If you have made a sound investment purchase, you still need to monitor the security to ensure it continues to grow overtime.