Right way of Investing in Stock Market

If you are thinking about investing in the stock market, then we have got the right article for you. So without wasting time let us discuss what is stocks. The whole stock market is an electronic database system where investors buy and sell shares of different companies. There are very many investment options available at present and it can help both individual and institutional investors to invest their money.

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The process of buying and selling of shares of a particular company begins with opening an account with any brokerage firm. Some firms like ICICI Securities, Kotak Mahindra Bank, Equity Exchange Services Limited, among others offer services to retail clients. Investment in equity markets is a good way of earning money for long term. It is more of a diversified investment as compared to other investments. Stocks can be considered as one of the best sources to earn money by investing your money. One should be careful while selecting any kind of share. This will help you grow the bank account. A simple rule to follow to make sure that you are not losing your money is having a minimum of 50% return after 5 years and a maximum return should be 100%. Many people who do not have knowledge about these things choose short-term investment strategies like Mutual Funds but they end up losing their money because of high volatility.

So how does financial adviser manage the client funds according to his/her requirement? First, you have to understand which type of asset you want to work on. Then your advisor can give you a clear idea of the number of shares required for success. For example if there are 10 lakhs of unlisted shares, your broker will get a list of all the 500 companies. After understanding the requirement of each company, you can decide upon them. You should also know the amount of risk involved which is the percentage of risk taken by one which can lead to loss of the account. Another thing to include in your plan is the income needed for achieving this fund size and hence you can estimate the total cost per share. For instance, one company which produces 6% of its earnings will require 60,000 rupees for every 1 share. To calculate the percentage of risk you need to know the rate of return which the company has recently achieved. Finally, you should analyze the growth plan so that you can determine whether your investment will become profitable or not.

There are two main types of investment made in India: mutual funds and private equity. These two are similar but you can use either of them for your business idea. And finally only when you have the money in hand then you invest for profit or growth of such funds. The purpose of managing the funds is very much important. Your financial advisor will guide you even before you start investing in stocks. Because he/she knows the importance of planning your investment plan. But most importantly, you need to select the correct securities that will help you achieve all these goals. Your financial advisor will explain to you the key points which a stock investor requires to think before taking any decision. Before you invest in stock market, you need to know what happens during trading. As mentioned above; if you are new to these trading methods and still not convinced about them you should ask for guidance from experts as well as friends. If you want to invest in mutual funds, you must understand the difference between stock index and common stock. You should check out our latest blog post titled How Can I Choose Mutual Fund?.

Now that you have understood everything related to financial planning read on and decide whether you like this venture or not. If yes, then go ahead and buy some stock, if not, continue reading till the last part. We hope that the following information is helpful and informative for investors. Also keep visiting our website for regular updates regarding our stock market articles and answers.

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