You’ve heard the expression that “diamonds are forever”, but stocks may not be. Most careful and conservative analysts will tell you not to make stock trading a career, unless you turn into Rakesh Jhunjhunwala overnight. If you are partaking in trading and investing in the stock market today, and have been successful so far, you may get the urge to go all the way and quit your job. While many investors have done this, they have started “careers” in the share market with care and after doing a lot of homework. Besides this, many individuals who decide to quit their jobs for full-fledged careers in stock trading, have some monetary backing, either with a part-time mode of employment or money at their disposal.
Quitting Your Job for Stocks
If you have a job, earn a salary, and are trading in the market with regular success, leaving your job may be a tempting prospect. However, you should have funds to spare if you are trading full time, and you must note that with a salary, you have a regular source of income. In turn, it is your salary that is fuelling your purchase of stocks. Nonetheless, when you open a demat account, you may have been wary of stock investment as many investors initially are, but if you are confident, you can trade longer hours. You may then earn the bulk of your income through stock trading. In the share market today, you will find a large range of stocks, so it is important to pick well.
What Stocks to Pick and When
Investing for the long term is a popular method of investment for several investors who may have regular day jobs, and wish to take an early retirement. If you are in the stock market today for the long haul, it means you are investing in blue chip stocks (large-cap stocks from prestigious large corporations) that are robust enough to withstand market volatility. These stocks will get you satisfactory rewards in the long run. Therefore, if you wish to plan ahead and quit your job at a later date, you can start your investment early, buying a long-term stock (or a few) and hold on till they reap rewards.
Recently, mid-cap stocks have done well for those investors who want to earn profits in the short run. If you wish to earn an income from your stock trading activity, these would be a good idea for trading in. You can also look at small-cap stocks. Experts from the industry suggest that mid-cap stocks enable you to get better returns as they act in the market quickly, compared to large-cap shares. Moreover, they are better than small-cap stocks as these are more unstable, financially. You could also consider an upcoming IPO that shows promise in the near future.
Take Your Pick
If you are thinking of quitting your job, in the near or farther future, you may consider these 5 stocks to get you on the path to earning a living:
- Crompton Greaves Consumer Electricals (mid-cap)
- Voltas (mid-cap)
- Crisil (mid-cap)
- Reliance Industries (large-cap)
- Tata Consultancy Services (large-cap)
Mix It Up
In the share market today, you can obviously find profitable large-cap and mid-cap stocks other than those mentioned. However, for the sake of diversification, you should have a mixed bag of stocks, with a few large-cap names and more mid-caps. You can open a demat account and start your trading at the earliest (but do your research first), or invest in any upcoming IPO to get your stock investment going.
For new investors, a FREE Demat Account with full service brokers like Motilal Oswal who provide expert research and recommendations for free can be really helpful as it reduces the risk of them investing in risky penny stocks while chasing higher returns. Open your FREE Demat Account with Motilal Oswal today!