It is usual for all to look in to the technical details like the details of the company, P.E. Ratio, Book value, the high / low prices in the last 52 weeks etc. before buying a Share / Stock of a company. Since you have just decided to enter the Share / Stock market, you need not worry about all these technical details and I shall give you simpler tips to you about Share / Stock market. Warren Buffet is known as the father of Share / Stock market investment. His investment formula is very much simpler. His approach does not have any confusion. I shall guide you through one of such simple approaches while investing in Share / Stock market.
What is the meaning of buying the Stock / Share of a particular company? It is very clear that you are also becoming a Stockholder / Shareholder of that particular company. It means you are also involving yourself in the same businesses that of the company in which you have decided to invest. Therefore, it is imperative that you carefully consider the basics of that business as if you will run the business of the company. Though there may be many such factors, it is enough that we concentrate on a few basics of the business in which we are investing.
Basics to consider before investing in Stock / Share market:
· We should decide which are all the hot businesses at the given point of time i.e. before we start our investment in Stock / Share market;
· Among such hot businesses, we should choose such businesses in which we have some experience or some talent or some understanding at least;
· We should also consider the financial environment and economic environment of our country. The above two environments should favour or at least should not be detrimental to the businesses we have chosen to invest in Stock / Share market. Also if the above two environments are satisfactory, people will certainly buy the products of many businesses;
· We should consider factors like whether the Government will support that business or will it oppose the business or will it regulate the business like license, pollution control etc.;
· We should also consider the price change trends of the input materials of the business along with Foreign Exchange trends [if the business is involving exports] and if required, the Currency trend; and
· We should see who are the competitors for the business, who will be the competitors in future and how easy the business can be done.
You may see all the above information as some of the important tips to start the business but fortunately they are also the tips you should be aware of before entering the Stock / Share market. You should prepare answers for all the above, about the businesses in which you are going to invest in Stock / Share market. If you are really satisfied with the answers to these questions, then you can proceed to buy the stock / share of that particular company.
Besides the above important tips for entering in to the Stock / Share market, there are two important factors you must consider for buying the stock / share of a particular company. The first factor is to consider the second point as given above. Therein, please substitute the word 'talent' with that of 'talent of the management of the company' and consider that the management of the company really possesses such talent to carefully govern the company. The company's management plays the role of an agent while we invest in the stock / share of that particular company. Therefore, you should consider the following factors on the part of the management of the company viz., Confidence, Integrity, past governance, future vision etc.
The second factor we should consider is that when we try to sell the stock / share of that particular company in the stock / share market, whether there will be enough buyers to buy the stocks / shares. It is like selling your business with good profit to other company to develop their business. Therefore, if you sell a particular share / stock in the share / stock market, there should be someone to buy those shares / stocks. The company should have good reputation for the said purpose.
Conclusion before you enter Stock / Share market:
Though the above points are enough for you to enter the Stock / Share market, if possible, you should also consider the following points:
· Over a period of time, the prices of good stocks will be on ascending side;
· Even though the prices of good stocks go down during Stock / Share market crashes or during global recession, it once again regains its position at the quickest possible time;
· If you have the investment duration for a period lesser than two years, then there is every possibility that you may end up in loss. This factor implies that please do not invest the money meant for purposes like marriage, studies of children, housing with in two years, in share / stock market; and
· If you invest money meant for other purposes with in short duration, then you may likely to end up with loss.
You should always remember the above factors before you start investing in Share / Stock market. Happy investing!
|Author: Mahalakshmi T 07 Jun 2011 Member Level: Gold Points : 1|
|First time share investors, do not take risk and invest a lot of money in shares. Invest for long term benefits and when you get accumstomed to the share market look for short term benefits. Never invest by borrowing money.|
|Author: Kranthi Kumar (K K) 13 Dec 2011 Member Level: Gold Points : 3|
|I'm getting calls from the share brokers to open a new account. Stock Brokers further adds: "Now-a-days, As the Indian markets are falling based on the global cues and other reasons, You can start investing in markets and get better gains when markets start moving upside". This is big trap by share brokers.|
If you meet any of the following criteria, You are suggested not to enter Share Market.
1. You have no time to monitor the markets during the day time (9:00 A.M. to 3:30 P.M.) as your work timings are coincide
2. I will be doing offline trading with the help of my broker and I will get in touch with him on mobile during market hours
3. I have some money which is kept aside for some personal need, I will move that funds into share market for short term and gain profits.
Happy Investing ....
|Author: Pravat Kumar Das 04 Sep 2014 Member Level: Gold Points : 6|
|Always remember if you get success then you can earn huge profit with small investment from share market.|
Before you enter in to share market ( remember it is a high risk and high reward trading avenues).
ask your self 4 question first-
1-. what should be your investment amount ( invest your surplus money, not hard earned not lending money).
2. how much time you can stay invested ( time factor is important as over night you wont get success).
3. how much return you want ( either each month or with in a year).
4. What is your risk taking capacity,( low risk, medium risk or high risk).
After getting all these three answer then start learning about share market from various sources like books, internet, expert traders etc.
as per your risk taking capacity decide the sector you want to start trading and see in 1 year you will be getting good profit.