Stock Investing: If you focus on these 10 aspects you will definitely make a profit ..!

With the change in modern lifestyle, one is forced to invest in corporate stocks by the income beyond the inflation rate and the tax benefit for income. Patience is as important as stock market investment. For those who trade in the stock market and those who are involved in futures and options called derivatives, a short period of time is enough to make a profit. But, it takes a long time to see the return on investment. The following 10 factors must be observed in order to make a profit on a stock market investment. 1. Long term investment ..! The reason many of us come to stock market investing. It is the immense return that it gives. The higher the return on the stock market, the greater the risk. At the same time, that risk spreads over the long term. The study results show that there is no chance of loss after investing in the Indian stock market for more than a decade. In the long run, the Indian stock market has been yielding an average of 15 per cent per annum. Stock market and company stock returns are unpredictable. The reason is that the change in the share price of a company depends on many things that happen within that company, things that happen internally, events that happen globally. But there is no doubt that the company's share price will increase significantly in the long run if the company's earnings and profit margins are better. Everyone says the formula for looking profitable in the stock market is to buy at a lower price and sell at a higher price. But, this is not possible in practice. Truth be told, in the market, it is not so easy to predict stock price fluctuations. At the same time, the share price of a well-performing company will continue to rise in the long run, even if for some reason in between. In that sense, it is possible to identify a good company and invest in it whenever money is available on its stock. Shares of good companies also fall during the downturn in the overall market. Then you can wait and invest. Or you can invest extra then. In doing so there is a chance of getting a good profit on average. 2. Explore the pantry yourself No matter who recommends it, no matter what the stock, you too should explore the pantry and then make an investment decision. For that it is good to have some knowledge about the economy and the functioning of the stock market. Any kind of domestic and international economic trends will affect the stock market. It is good to know the basics, such as how the stock price will go down in case of any kind of problem in a company. It is important to look at a company's past earnings and profit margins and at the same time look at what the prospects are for future growth. It is always important to do proper research before investing in stocks. But this is rarely done. Investors typically invest in sector stocks based on the company in which they work. This is wrong. The reason is that when a particular sector is affected, so are those who work in that sector. The price of stocks in that sector will also see a decline. In this case, the problem at work, the problem may be the problem of equity investment. Therefore, it is better to avoid investing in stocks based on the sector in which you work. 3. It is important to buy and sell at the right price ..! Fundamental Analysis decides which company to buy. Technical analysis allows you to decide at what price to buy and at what price to sell. It is very important to buy at the right price and sell at the right price to see the return on stock investment. The nature of the stock market is volatile. When the stock market crashes for some reason, the price of good company stocks also falls. Then do not panic or rush to sell stocks that are at a loss or have a slight profit. If what you have invested in is a good company share, and fundamentally a strong company, the situation is right and its price will inevitably rise. In return for selling, do not hesitate to buy and add when good company stocks are well priced down and available cheaply. At the same time, when a fundamentally weak company stock price is low, most people should not buy for what they are buying. 4. Continuous investment is important Stock market investing should not always be done in bulk. If the market collapses too much after making a total investment it will take longer to recover. Thus, the investment amount can be divided into 4,5 and invested at regular intervals. Better way than this. Is to continue to invest a certain amount each month. In doing so it is very important to choose a good company role. The Ruby Cost Average is likely to yield a good return on average when investing consistently. The amount of investment does not have to be large when investing consistently. Even a small amount can be invested monthly. 5. It is mandatory to divide the investment ..! Diversification is the oldest method of making a profit on a stock market investment. That is, putting all the eggs in one basket is as risky as putting the entire investment in one company. Do not always invest in only one stock or one sector, assuming it will perform well. The problem is that the specific sector in which one has invested and the institutional role of that sector is not functioning properly. Therefore, it is necessary to divide the investment into different stocks belonging to the dental sector. One can greatly reduce the risk by investing in good company stocks belonging to at least 3 or 5 sectors. For example, (not recommended) investing in shares of DCS, Lupine, DLF, HDFC, Divis Motor Company, etc. . Some will only invest in large cap stocks, which are very large companies. The risk is lower when doing so. At the same time the income will be less. To see good returns through the stock investment mix you need to diversify the investment in all stock market value stocks. That means investing in large-cap, mid-cap and small-cap stocks. Large cap stocks are ideal for an investment period of 3-5 years. This applies to mid cap stocks with an investment term of 5 to 10 years and small cap stocks with an investment period of more than 10 years. 6. Tips, do not invest based on rumors ..! Many people invest in stocks based on tips and rumors. Doing so will often result in loss. It is very important to stay away from such things to see the return on stock market investment. In general, most people in the stock market do not need to invest in that stock just because they invest in it. That is, it is not right to act in a herd mentality. It may pave the way for you to lose your capital. Warren Buffett, the world's foremost investor, said, "Be afraid when others are greedy, be greedy when others are scared!" That being said it is noteworthy here. That is, stay away when others chase the price of the stock and invest in a higher price; That means investing when others sell in fear when prices fall. Focus more on Fundamental Analysis of Companies and Technical Analysis of Stocks. Try to learn these. If not here's a new product just for you! 7. It is mandatory to look after the business of the companies Understand the business of the company you are going to invest in. Then invest in that company. This is how Warren Buffett, one of the world's leading successful investors, made his investment. . The business model and strategy of the company should be excellent. Also, its products and services should be such that the company can function better in the future as well. And it is good to be very strong financially. 8. Debt free company Whenever possible you should have all of these components in place for launch to maximize profits. Only then could it have functioned better in a predicament such as the Corona vulnerability. Debt should be low though. The interest should be low. Get involved in debt consolidation. You can invest in such company stocks. 9. Do not borrow to invest in the stock market This is a concept that is often stressed by stock market investors. The value of the investment may decrease at any time in the short term as the stock investment becomes more risky. You will also have to pay interest on the loan. In the event of a sudden problem, if the value of the shares is very low, a situation will arise in which they will not even be able to sell them and repay the loan. One thing investors should never forget. Surplus money should be invested in the stock market. Do not invest in the stock market for any reason that holds for short term demand. 10. It is necessary to oversee the investment Many people invest in stocks and do not pay attention to it. It is necessary to carry out supervision and review at least once a year, as it is once a year. Stock market investing is not like a fixed deposit. Its value and functionality are subject to change at all times so it is essential to monitor its performance at least once a quarter. Following the above 10 rules will definitely give you a return on your stock market investment. Do not wait for the right time ..! Many stock market investors think they can enter the market (Timing the market) over time. Some are waiting for the market to come down even better when it is down. But, the market goes down a bit and goes up. Still others say the market is at a new high. Now they are waiting for the down payment to buy at a higher price. But then the market goes up without dying. Therefore, there is no need to look at the time period to invest in company stocks. Until now no one has predicted the stock market volatility 100 percent; Can't predict. Technical analysis will be somewhat helpful. Predicting the ups and downs of the stock market is impossible for anyone. Expect a reasonable profit ..! Some people invest in the stock market looking at 50%, 100% profit per year for unfairness. This is the biggest mistake. In general, the stock market can be expected to benefit from the numerical gain available by combining the country's GDP growth rate and inflation rate. For example, if the country's GDP growth rate is 7 percent and inflation is 6 percent, one can expect a return of 13% or a maximum of 15% on stock market investment. According to Asset Allocation, it is wise to convert the profit to a different risk free investment when the return is more than 15% per annum.

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R K G Capital Gains

Certified Equity Research Analyst, Technical Analyst , Investor , Trader , Trainer and Mentor

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