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A Look at the Stock Market

March 17, 2014  by: ushakiran  Points: 12   Category: Investment  Earning $0.75   Views: 698

Share markets ( both Nifty and Sensex) are a good investment and one can make a substantial profit within a short period of time and multiply one''''s money by being aware and cautious.

         

A quick look

Indian stock markets seem to be uncertain of which direction to take most of the time. There is no fixed direction which they take .Any positive or negative trend is temporary and largely based on the political and economic conditions faced at that time .

With the General elections and the unsteady political situation at the center now one can never be sure which direction the stock markets would take in the coming months. So, it is better to be cautious while investing in shares especially if you are a short term investor and planning to make some quick profit.
This is definitely not the time for it although the markets have now reached new heights currently the Sensex index having gone above the 20,000 mark.Some share prices have reached new heights so you need to wait until the prices come down to buy, whereas it is a good time to sell if you are already invested in stock market and the prices of your shares have gone up considerably.

Whereas ,if you are planning to remain invested for a longer period of time and have been looking at some stocks, you can go ahead and buy those that have fallen considerably. Here too one should be cautious and buy only a small number of stocks at a time since one can never be sure whether the trend would suddenly change in a week's time.



A few useful tips

It is not at all easy to deal with the stock market even for those who have been trading for a number of years. However, a few of these time tested tips could help you reduce your losses and may be even make some money for you !

1, Most importantly, make sure that you don't invest all your savings on stock market. It would be foolish to do so since you can never be sure about market trends. Never invest huge amounts of money in any one particular share either !It is wiser to diversify and buy shares at Market dips in small quantities.

2, You need to have loads of patience while dealing with shares and have to be at it on a daily basis since the prices fluctuate each day sometimes to the tune of 2 or 3 % which can go either way for you ! If the change is negative you are losing money and if the change is positive you are making a profit and you should sell and take your profit since you can never be sure what would happen the next day.

3,It is very essential to have at least some knowledge of the shares you want to invest and trade in and follow the trend of share movement for at least a week before buying. After you buy it is even more important to know about the shares you are invested in, any sudden change in company policies etc which would have an effect on the share prices.

4,Keep a check on share prices and movements on a daily basis. If and when you see a dip buy a few more shares so that you can average out the losses. Both buying and selling are important in stock market .Unless you sell at the right time you will not make any profit and if you want to hold on to the shares buy them back when the prices come down which will happen in a few months.

5, Invest only what you can afford to do so, never borrow money or take a loan to invest in the stock market. Most people get stuck because they stretch beyond their limit and face a difficult situation when they have to pay back their loan and the share prices are down.

6, Buy a few blue chip shares that are listed in the top 100 list of the Sensex. These shares may be slightly expensive but they are steady and are of good companies that have been around for many years. Trading with shares that you already possess is the best bet - selling when the prices go above your buy price and buying back a few more of the same when the prices fall below your buy price .This way you increase the number of shares without any additional investment. The profits may not be huge but there will be no losses either !

Conclusions

Share markets ( both Nifty and Sensex) are a good investment and one can make a substantial profit within a short period of time and multiply ones money .However, you need to b careful since unlike in bank deposits where you don't need to do anything until the maturity date , here you have to track your shares on a daily basis from Monday to Friday when the share market is open.

For those interested in stock market it is a lot of fun and exciting to track the share movements and make some quick profit.As long as you are cautious and aware of what is happening shares are excellent for multiplying your hard earned money.




Comment(s)
Author: Dinesh Xavier        
Posted Date: 03/29/2014    Points:2    

Wonderful article and this post helps the beginners(traders and investors) to understand the market and they can make their investments in a correct manner.

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