Whenever Stock market at its peak: 10 features to look out for ..!

The Indian stock market has touched a new high. The Bombay Stock Exchange (BSE) Sensex is up 56000 points and the National Stock Exchange (NSE) Nifty is up 16500 points. After that the market comes from a slight volatility. Mid and small cap stocks contributed the most to this decline. In this situation where the market is at its peak, small investors need to look at some key aspects. 1. Evaluation is very important Valuation is very important in equity investment. Avoid re-investing in high-value company stocks when the stock market is at its peak. The reason is that prices are not likely to rise much after that. 2. Stop-loss is mandatory in stock trading ..! Stop Loss is mandatory in daily and short-term trades. Do not trade without it. The reason is that the market may suddenly fall when it is at its peak. Shares of mid-cap and small-cap companies may also fall sharply. 3. Consider Technical Analysis ..! At what price to buy a share; Technical analysis will indicate at what price to sell. In that sense, it is possible to trade and invest using it. At the same time, keep in mind that there is a three to ten chance of going wrong in Technical Analysis if something suddenly changes depending on the company, the country, and the world. 4. Do not turn a loss into a long-term investment. Many will buy multiple shares with short-term intent. Those stocks will be at a loss even when the market is at its peak. Do not try to convert those shares into a long-term investment without wanting to sell them at a loss. You can not add wealth by investing in the stock market unless it becomes such a long term investment. 5. Consider the basics of the company Be sure to look at the fundamentals (Fundamentals) of the companies. That too must be considered when it comes to long term investment. The basics are to look at the credibility of the company's founders, the debt-to-equity ratio, the share capital of the founders, the company's cash flow, net sales growth, net profit growth, and future expansion plans. 6. Do not make a total investment Never make a total investment as far as stock market investing is concerned. That too should not make this mistake when the market is at its peak. Always divide the amount you plan to invest in a company into three or five parts. Invest this amount at regular intervals. Or invest in a market downturn. Until then, you can see a small return on that amount by keeping that amount in a liquid mutual fund. 7. Dividend investment in multi-sector company stocks Many are investing in sector-based corporate stocks and sector funds. Investing in a single sector has always been a high risk. It is a good idea to split stock market investments into two categories. Dividing when the market is at its peak will also help reduce risk. 8. Beyond Index Shares! In general, if the Sensex and Nifty indices are high, we say the market is at its peak. However, many company stocks outside of this index are available for investment at attractive ratings. It can identify such stocks and invest at market peaks. 9. Profit booking Do not hesitate to take out partial profits if the stock has given you higher returns than expected. This is called part profit booking. The stock market can continue to sustain profits by taking out profits in between investments. Also, it can increase profits. 10. Follow Asset Allocation Lastly, always invest according to your asset allocation according to your risk taking ability. That is, the asset allocation must be balanced from time to time, whether the market is ups or downs. If your equity investments (company stocks, equity funds) are highly profitable when the market is at its peak, sell them according to the asset allocation and increase your investment in debt based funds. For example, one is fifty years old. He should have made 50 per cent of the stock market based investment, 30 per cent of the credit market based investment and 20 per cent of the gold based investment according to the Asset Allocation. His Rs. 2 lakh investment of Rs. 1 lakh per share and Rs. 60,000 depending on the loan and Rs. 40,000 Gold was also in the ETF. These investments are valued at Rs. 1.5 lakh, Rs. 70,000, Rs. Suppose it has increased to 50,000. 50: 30 according to his asset allotment; Rs. 1,35,000 as per 20; Rs. 81,000; Must be Rs.54,000. Therefore, to fix the asset allocation one has to sell 15,000 worth of shares in the stock investment, this Rs. 15,000 out of which Rs.11,000 is in loan schemes and Rs. 4,000 should also be invested in Gold ETFs. Doing so can maintain the return on equity investment and reduce the risk of the investment portfolio.

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R K G Capital Gains

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

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