A new book tells beginners how to invest directly in stocks (instead of mutual fund schemes)

Most investors would do well to invest in equities through equity-oriented mutual fund schemes. However, if you have the time, inclination, and flair for directly investing in equities, you will find it profitable to do so.

As a beginner, you can learn the tricks of the trade through a virtual portfolio available freely on broker websites. By incurring only trading costs, without committing money, you can understand the market. It prepares you for the real battle ahead.

To invest directly in equities you need (a) a basic level of financial knowledge, (b) confidence in your abilities, (c) a certain commitment of time and effort, and (d) a certain corpus of investible funds to create a diversified portfolio. If you don’t satisfy these conditions, you should resort to indirect investment in equities through mutual funds.

To invest on your own, you have to learn the basics of fundamental analysis and become familiar with some elemental tools of technical analysis. This chapter seeks to briefly discuss these two approaches to stock selection and offers some guidelines that will serve you well.

The stock market is thronged by investors pursuing diverse approaches. The two most commonly followed approaches are the fundamental approach and the technical approach. The basic...

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