A combination of soaring stock market returns and aggressive marketing on social media has increased the lure of buying shares directly. However, the stock market can be an expensive place to learn without a planned approach. Equity investing is a game of probability. A short-term trading-based model or longer-term buy-and-hold investing are the two common approaches.

Short-term trading may be attractive but is also more risky. Beginners can start with the long-term buy-and-hold investing model. Besides, trading can often become gripping and addictive .The following suggestions can increase the probability of your success in equity investing:

1. Build A Solid Foundation Of Allocation: Allocate to direct shares only after building a solid foundation of allocation to safer investments such as short-term and safer debt mutual funds and diversified equity mutual funds. Allocate to direct equities when there is no short-term cash flow claim so that you have holding power when markets inevitably dip or fluctuate. Start small and gradually increase the allocation.
 
2. Get Proper Guidance: Build a diversified basket of at least 15-20 shares keeping the maximum single share exposure to 5-8 per cent and a holding horizon of 4-6 years. For small investors, a good innovation is the service of offering a professionally researched basket of stocks from established platforms. There are also online paid services of investment advisors registered with the Securities and Exchange Board of India (Sebi) without large minimum investment criteria. Choose Sebi-registered investment advisors who have investing track records of at least eight years and through boom and bust cycles. The recent trend of luring investors through unregulated and free YouTube or Instagram channels into happening and exciting areas such as electric vehicles, artificial intelligence and Deep Tech companies is best avoided unless supported by sound research. Such investment decisions can end up being a chakravyuh where it is easy and exciting to enter but can leave you gutted with losses when markets fluctuate and fall. Serious investing is a slow-cooking long-term process and should not be confused with short-term excitement and entertainment. IPOs can be considered for a smaller allocation in your overall equity allocation if you must.

3. Continuous Learning: Today, you also have stock market apps that enable you to build a notional and simulated portfolio without investing actual capital. This allows you to get a feel of markets without risking actual capital. Devoting time to continuous learning through online equity investing courses from experienced and qualified investment professionals will also help you become a more measured equity investor.

The author is Co-founder, Scripbox