Posts
1>WHAT ARE SHARES AND WHICH SHARES SHOULD BE ACQUIRED?
Shares means Ownership.
Acquiring shares of a particular company means you have a stake in that particular company.
A company whose shares you have purchased is answerable to you. They send you an annual report regarding various information about the company such as financial accounts, profit and loss accounts etc..
The management communicates through the balance sheet and the AGM, where shareholders voice their opinion on the performance of the company.
2>WHICH COMPANY SHARES TO PURCHASE?
This involves little bit of research and a logical mind.
Try to understand what is in demand.
In newspapers you get to here about various activities such as infrastructure boom, IT boom, bank loan facilities are getting successful which means there is a boom in financial sector and so on.
1>Watch news channels such as Zee Business and try to acquire information on what sectors are flourishing or are going to be in demand.
2>Watch out for the share prices of various companies trailing at the bottom of the screen(ticker) on Zee Business or other news channels.
3>Select company which is a recognised one and which belongs to A,B1,B2 group as they are the stable and secure companies.
Group of company can be determined by typing name of company in
www.sharekhan.com and then clicking on the name of the company or you can simply post the name of the company in the comment section and I will provide you with the group information.
4>Check out the annual report of the company. The annual report will provide info on the sales turn over of the company, the profit and loss of the company in the various quarters etc. This will give you an idea whether the company is flourishing or is in dumps.
3>IS IT RISKY TO INVEST IN SHARES?
Risk is involved in everything.
Risks are not involved if you don’t invest entire money on some company which is going in loss, its not going to give you any returns.
If you invest wisely in good companies which are recognised and have a reputation in the market then there are NO RISKS involved.
So stop acting dumb and invest wisely is the need of the hour.
Two types of Risks are involved:
1>Company Risk:
If the company is recognised, reputed then no need to worry. The company may suffer temporary losses but will not run with your money, you will get sufficient to magnificent gains later in the future.
2>Market Risk:
The market may be down which may lead to low share prices but that is a temporary phase when the market goes into correction and happens from period to period.
But this phase should be used to acquire shares of many good companies as the prices are low, when market rises the share prices will shoot up giving you maximum returns.
THUS, IT IS NOT RISKY TO INVEST IN SHARES.
2 comments:
This is a good introduction chapter to investing in shares.
Personally I am an active share trader and I find this the most powerful investment method. However this is a method which should be used after gaining information. It also requires that we check the status of our investments regularly.
There are 2 common methods used to analyze investments in the share markets. These are technical analysis and fundamental analysis. The basics of fundamental analysis have been mentioned in this article.
You could check out my website for information about technical analysis. It explains the benefits of technical analysis and simple and profitable Technical analysis strategies and products. Click here to visit my website to Profitably invest shares spending just 10 minutes per day in analysis
Post a Comment