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  • Did you earn in stock market by studied strategy or luck

    How does one learn how to earn money in stock market? Wondering if one studies strategy or is it through luck? On this Ask Expert page find suggstions from our experts.

    Stock market is as attractive and inviting to people as the film world.
    In both fields we are told about the success stories. The failures and disappointments are never highlighted. So most people dream about these two fields, especially when thinking of making bulk money faster.

    No one in the stock market field can deny that a lot of money is burned. Even the reportedly successful would also have lost at some or other times.

    I need a frank and right answer from experience whether you earned money from stock market by properly using well studied strategies and systems or got profit and money by fluke or chance or luck.
    Is there any sure success formula for earning money in stock market?
  • Answers

    10 Answers found.
  • I study the market and take the opinion of my financial advisor and I invest based on my final opinion. I have a well-known person who is a financial analyst. he will be always doing this share's business only. So whenever I have a doubt I will be taking his opinion. Initially, I invested Rs.3000/- in 1991. At that time I don't know anything about this business. One of my colleagues was doing this business. I gave him this money and he did the business but I lost all the Rs.3000/-. For some time I stopped investing in shares. Again in the year 2006, I started purchasing the shares and this time I myself doing and I am taking the help of my friend who is a specialist in finance and investment solutions. So far I have not lost here but gains are also not much.
    We have to spend a lot of time observing the market and we should know the performance of the company in which we want to invest. We should be observing the trends and at an appropriate time, we should go for the share and again we should sell them at a suitable time. There will be some standard shares where the chances of value coming down are very less. If we invest in such companies we may not lose.

    always confident

  • I welcome answers as the one posted above coming from one's experience. It is such guidance on practical ways, tips and cautions that beginners expect. The theory and technical aspects are all available in other sources including from online sources.

  • It is usually said that people always lose all their savings in the share market. I also remember one doctor in our locality who is fond of investing in the market and lost everything. But is this true?
    Everything requires deep study and the same is with the share market. But, those who are investing to make small gains and investing very meagre amounts then studying the market is both useless and impossible for them and when we go with small funds then it will not affect our wealth. But remember the market is like a lucrative destination which tends to make the buyer more and more greedy. For instance, if today you gain a thousand from the market then definitely you will desire to invest that 1000 and principal amount as well. That's why day by day our investments rise in the market with the same strategy or without a strategy which we are following while investing meagre sums, and one day the investor will lose all principal and returns earned on it.
    So while investing larger sums a well-defined strategy is necessary to develop and also timely changing such strategies is also necessary to match with changes in the market. I once read an interview with Vijay Kedia in which he mentioned that he studied a particular share for about four years before investing in it. So it is necessary to have a thorough research of the market. In connection with market research, you can follow journals or some books like "Intelligent Investor" by Benjamin Graham which is one of the best books. If you want to earn from the market then don't be a speculator but an investor and most people use both terms interchangeably but both are distinct. A speculator focuses on short term gains but an investor focuses on the real value of shares and hence real value never get affected by the psychology of investors that's why chances of losing minimised.
    Some also advise investing in the long term is profitable and it's even true if we look at the BSE index which is about 500 times in the last 30 years.

  • Many people want to invest in share market and earn money from it by doing judicious investments. There are a large number of people who are already doing this but when you ask them about the gain made by them then they will have different versions. Some of them would tell that they had lost their money in that fire while a few might boast about the good gains that they could made in it. It is very difficult to make any way ahead with their experiences. Some of them might not be able to give the exact status as there are many other computational complexes in these investments and very few people can make out as what would had they gained comparatively, if they had kept the money simply in Post Office or bank.

    Share market investment is a high risk investment area and there are both the possibilities - lose money or gain handsomely. There are so many guidebooks and mathematical models to take decisions in this area for making a good return. Also, there are experts and brokers who are ready to provide expert advices at a drop of a hat. So theoretically a lot of background material is available for ones reference before one invests in the share market but the true results would only come later when the money is invested in it.

    When a person wants to invest in share market then the first few questions that come in mind are - Which company shares to buy? Which sector to buy? How much to be invested in that company? How long one should remain invested? The answer to these questions is not simple and requires much experience and prudence in this challenging area. It is generally believed that people who invest in top companies are generally rewarded better. What do we mean by top companies or blue chip companies? These are the companies who have given good results in the past and the future business environment is also going to be better for them. To identify these companies is the main task and if one limits oneself to them then the chances of earning from the share market increase. Another important point is that by investing in some of these blue chip companies even if a few of them fail with time the net resultant gain will still be in positive side.

    One of the crucial thing that is very pertinent in share market investing is the duration for which one has to remain in the market invested in a particular share and when it is to be sold. It is generally felt that a long time strategy in these matters is more profitable. Some people argue that whenever the share market is low buy them and whenever it is high sell them. It seems so simple and straightforward but is next to impossible when we really start trying to do that. The market movements are so unpredictable that by the time one decides to sell or buy the share prices get discounted by that factor because the brokers and other experts have taken cognisance of those feelers quite earlier than the normal investor. So taming the market is not the cup of tea of an investor. Many people have already burnt their fingers while trying that difficult task.

    Another point is that time to time there would be some scams or disasters in the market and many investors would be fearful and sell their share holdings for a low amount only to repent later when market boomerangs to next high. So, patience is a very important factor that is required if someone wants to be a shrewd investor and make handsome gains.

    In the end I would simply say that there is no magic formula for making money in the share market except invest in selected scrips, stay for a long time and avoid the small lures that would come across time to time to distract us from our main objective of earning money from the share market.

    Knowledge is power.

  • Very good question on stock market dealings. Many people are engaged with such dealings as a:-
    Profession to earn income
    Casual workers to pass the time and always expected to make money but fail
    Retired persons engaged to earn from share market
    Employed person with the investment company do their duty as an expert.
    Now, who have taken it as a profession they are very serious and do lot of study and strategy and regularly earning money.
    In the year 1997, I started investing share through broker house over phone and invested around Rs.50000.00 and get total return only Rs.10000.00 after 3 years and closed the account.
    Again in the year 2009, I open another accounts with broker house and started self online trading during office hour. Then really I understand the actual strategy by transacting through TT terminal . I was enjoying and earnings on average 60% and losing 40% cases. I was devoted time from 9.30 am to 10.30 am and 2.30 to 3.30 pm on working days and doing day trading. Purchase and selling on same day/time. In other cases stop loss order system taken so that there is no loss. As the time was very crucial , I could not continued and after 3 years I discontinued with profit margin avg 2 to 3 thousand per months.
    So to earn money from stock market you should have operated the same by self with normal strategy.

    Believe in the existence of God the superpower.

  • From the answers posted till now, reinforce my feeling that for ordinary people,(not the dedicated professional traders) the share market can give some additional income. But not a very high amount. Whatever is projected outside is exaggerations or half truths. The failures are hidden and only success highlighted.

    Just for an academic interest I sent a query message to a whatsapp number that promised excellent tips and advice on long-term share investment on multi-baggers., two stocks per month. Prompt came the reply giving details of their subscription payment. It amounted almost 2000/- per month.

    So it is not worth if one earns only 1000/- per week or so.
    The high earners are the speculators, syndicate traders and bulk intra day traders.
    Though there is a claim about fundamentals, technicals, management expertise,results etc,
    my preliminary observation with the eye of a commoner made me to conclude that there is no perfect system but it all depends on how a 'few' can manipulate. Many times there is it defats all logic and 'market watcher' come with various and curious justification on 'market sentiments'.

    Hope to see some more experienced answers to have things more clear.

  • Don't be tempted by the news that your neighbour has earned a substantial amount by investing in shares. If you think that luck is the important factor making you rich within a short time frame, this might be in some cases but for the remaining investors, they need a lot of disciplined approach having different considerations prior to entry to stock market. The following strategies could be implemented while choosing the shares from the market-
    1) You need to learn the basics and this can be achieved through your own experience and analysis. You need to go through the different journals related to news of share markets, its performance etc.
    2) You need to carry out a lot of research in relation to performance of a share over a period say for five years, their board of directors, promoters, their current business and its expansion if any for the multiplication of its business etc.
    3) Study the right price to be paid for the stock. If the current price is below the intrinsic value, you would require a careful study prior to its investment. Underpricing are sometimes the transitional phase but you need to have a careful planning.
    4) Stay invested for a long time horizon. You need not worry about the fluctuations taking place time to time. Make it a point to remain invested for a considerable time to rake up the maximum benefits for your stock.
    5) Understand the basics of price evaluation- Some investors start selling their stocks at a high price considering that they have been benefited enormously with such deals but the speculators would be active to push up the prices further upwards. Hence you need to understand the strategy of the market.
    6) Try to estimate the intrinsic value of the stock and this can be achieved through you long exposure to the market trend.

  • Well known Warren Buffett was once zero and he is billionaire since few years / decades from the share trading. Only thing is we need to take extra risk on the share trading by investing little bit amount (which the amount must be like a surplus one or ignoring one) to learn as a layman.

    Share market has different channel and scheme, like, IPO, Equity, Mutual Funds and on. It is always better to do it by own even though you take advice from DEMAT service provider or expert on this. The share market value in the country also depend on international share market.

    However, try to invest few thousand bucks in different shares or scheme to learn and improve yourself. Timing is also very important factor to invest or buy or sell in the share trading.

  • Stock market behavior are subject to market risks and the investor has to be doubly sure before investing as to which share is going good and which is average or worst. Never go by the advice of brokers who may sometime misguide you. Profile of the company is known for every investor and that should give the broader perspective of past and present performance. Never invest on those stocks which are good at past perfomance and going slow now. The timing and the luck factor also matters in share market. Those who earning frequently and bound to loose in one stock or the other.

    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • You cannot call it as luck you can call it as gamble. Its like taking a lottery ticket and waiting for results to come and hope that you win. In reality you know what happens. To earn in stock market one should have a strategy, try that strategy if you are earning continue and improve that strategy. If you are not earning through your strategy just change or improve your strategy. There is no earning without strategy.
    Even if you are doing any job, that requires certain skill set and education. It doesn't come by luck or gamble.
    So yes, in every work strategy is required to earn.

    I have good experience while earning in stock markets and yes that came with certain strategy. Few of the stocks in my portfolio are in green and few are in red but the average of the portfolio is green and at par or better with the market or its indices.

    And I do have some penny stocks upon which i gambled and they turnout to be multi-bagger. Please note here, that I do not put lot of money on the penny or gambled stocks. I put small portion of my profit which I earned through other methods of stocks, so even If I loose this amount I don't have regret, but if it turnout good then I earn handsome amount. And yes, even if they are penny stocks or gamble or bets, I do some study on such stocks even before gambling.

    Happy learning.

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