The Indian stock market is one of the most volatile stock markets in the world. The stock exchanges do brisk business during the trading hours where even a good number of multi-national companies have also secured accounts through their resident permanent establishments. For a newbie investor, the market environment can quite dizzying and incomprehensible. However, for the masters of the game, the stock market is a bank from where funds blow block in multiples of their initial investment.
Among the most common share trading tips, few are described in this article. These tips will aid new investors in having an understanding of the share market and to protect themselves from the possible happening of perils. Most investors tend to follow the crowd and take investment decisions based on group sentiments. It is always better to rely on personal research and study based on which investment decisions have to be taken. It is recommended not to buy stocks that show an unusual boom as they can be due to short corrections in the market which can return to normalcy. Investors who purchase such shares on the expectation of earning long-term incomes will be disappointed and will also lose their funds.
Factors to look into before making an investment
Any investment decision should be backed by a logical reasoning. Investors can apply scientific tools and techniques to identify whether a particular stock is performing or under-performing. Based on the results of such analysis it will be possible to identify stocks from which maximum wealth can be accumulated. Various financial rations like Earnings per share, profit earnings ratio, market price per share, etc. help in identifying the worth of a share of any company. National and international events that lead to market changes can be the right time to invest in performing companies. Quite often share prices and the entire market index witnesses a fall in prices as investor’s panic of negative outcomes and try to sell out all their investments. Those investors who take advantage of such situations and make the right investment decisions will be able to reap huge dividends and wealth maximization in the long run.
Depending on the various financial plans the income earned will also differ significantly. For instance there are standard investment policies in which investors can deposit a fixed amount into the capital of a particular stock. Unlike bank deposits, the investors will be able to enjoy the income from the appreciation of price over a period of time. However, in such cases it should be ensured that the investment is not made in penny stocks or small caps as the capital appreciation can be insignificant compared to the capital incurred. Hence, it is always advisable to go for stocks in the blue chip level which have gradual but steady increase in the prices ensuring wealth maximization. Sticking to the basic of share trading and ensuring decisions are taken based on logical reasoning and not emotionally will lead to eventual success in the share trading profession.
Subhash Jain is sharing some share market tips for invest in Indian Stock Exchanges for all type of nse tips, equity tips, mcx tips, ncdex tips, commodity trading tips, future tips, nifty trading tips etc.