Understanding the Basics Before You Invest
Nepal’s share market, commonly called NEPSE (Nepal Stock Exchange), is booming in popularity among working professionals, students, and families looking to grow their savings. However, investing in shares isn’t a guaranteed way to make money, and many beginners face losses simply due to lack of basic awareness. The good news: a few simple steps can greatly reduce your risk. Here are practical tips that every aspiring Nepali investor should follow to protect themselves and avoid costly mistakes.
1. Open the Right Accounts First
Before anything, you must open a bank account, a Demat account (stores your shares electronically), and a broker account. These three accounts are the foundation of all trading activity in NEPSE.
- Demat Account: Visit a bank or broker office with your citizenship certificate and recent photo – or use online banking services that offer an eKYC process.
- Mero Share Account: After your Demat is ready, you’ll receive your Mero Share login. This portal is essential for applying to IPOs and tracking your holdings.
- Broker Account & TMS: For buying/selling stocks in the secondary market, register with any authorized broker in Nepal. You’ll get a username and password for their trading portal (TMS).
For official broker list and guides, always check the NEPSE official website.
2. Always Research Before You Buy
Don’t follow “hot tips” from friends, social media, or rumors. Spend time reading company profiles, watching their recent performance, dividend history, and future prospects.
- Use your Mero Share account and financial news sites to analyze if the company is healthy and operating profitably.
- Start with established, well-known companies. Avoid little-known or newly listed stocks unless you understand the risks.
- Remember: If something seems “too good to be true,” it probably is.
3. Don’t Invest All Your Money at Once
The cardinal rule: Never put all your hard-earned savings into shares at one time.
- Diversify: Spread your investment over several sectors (e.g., banking, hydropower, insurance), not just one stock.
- Start Small: Begin with a modest amount and only invest what you can afford to lose without impacting your day-to-day life.
4. Set Clear Goals and Avoid Emotional Decisions
Set a target for each investment: Are you holding for long-term growth, or looking for small, short-term gains?
- If a stock suddenly drops, don’t panic-sell. Review why it’s falling – is it company-specific, or just overall market trend?
- Stick to your plan and do not let market rumors or emotional fear drive your decisions.
5. Understand the Risks of IPOs
IPO (Initial Public Offering) may look attractive, but not all IPOs perform well after listing.
- Always read the company’s prospectus in Mero Share before applying.
- Don’t apply blindly for every IPO. Focus on companies with a proven record or a solid plan for the future.
6. Beware of Common Mistakes
Here are some of the most common errors by newcomers and how to avoid them:
- Investing based on rumors or social media “tips.”
- Buying stocks without checking the company’s background.
- Ignoring transaction fees, broker charges, and taxes that can eat into your profits.
- Trying to “time the market” or making frequent trades based on daily price swings.
Common Share Market Mistakes (Chart Example)
| Common Mistake | Impact on Investment | |----------------------------------------|--------------------------| | Following friends/social media blindly | Often leads to quick losses | | Ignoring company fundamentals | Can mean holding risky stocks | | Over-trading | Higher transaction costs & stress | | Lack of diversification | Greater risk from a single bad stock |
This chart shows how typical beginner mistakes directly affect your investment safety and performance.
7. Regularly Track and Learn
Use your Mero Share and broker TMS accounts to monitor your portfolio and see which shares are performing. Study past market trends, company news, and regulatory changes to keep learning.
- Join investor groups or attend free webinars by experts for more insights.
- Ask questions in forums but always double-check answers from official/authoritative sources before making decisions.
For ongoing updates, check out articles on Nepal Stock Exchange Guide and Digital Gurkha’s Investment Basics.
8. Know the Rules and Protect Yourself Legally
All NEPSE trading activity is governed by the Securities Board of Nepal (SEBON).
- Read about the latest regulations and company laws before investing.
- If something feels suspicious, report it to SEBON or check with your broker.
Conclusion: Simple Habits, Strong Protection
The share market offers growth but also risk. If you lay a strong foundation—open correct accounts, research companies, diversify, set goals, and keep emotions in check—you can greatly reduce losses and make smarter choices.
- Never stop learning and always use official resources before making big investments.
- Being patient and practical is better than chasing quick profits.
Useful Links and Resources
Bookmark these pages for safe, informed investing in Nepal’s share market.
