Stock Market Investment Advice
By: Edgar | Posted: 10th April 2007
Equity is undoubtedly a sound investment opportunity in recent time.
With plus 9% GDP growth, Indian stock market
is simply a mind-boggling investment destination. But, unlike fixed incomes,
equity investment deserves more investors’ attention and thorough research.
1.Understand the basics of Economics:
Like any other market, stock market also follows the law of economics,
particularly the mechanics of supply and demand. If there is a greater
demand for any stock, its price will go up. On the other hand, if there
is less number of buyers for any stock the price will fall.
2.Study the potential company:
To make any successful investment in stock one need to now the company
whose share he or she is buying. Specially, knowledge regarding its business,
past performance and future potentiality helps a lot in making healthy
investment decision.
3.Make it a habit to read and watch the news:
Dealing with the stock market is no guesswork. Sound decisions making is
the result of constant learning about the local and global political and
economic incidents. Often news create immediate stir in the market. Proper
analysis of any news item is important since that can affect the company or
the sector’s performance, we are concerned with.
4.Spread your investments:
Avoid putting all eggs in single basket. If all your money is invested in
a single company, the chance of making lose becomes greater. Spread the
money over more than one company; it will minimize the risk of company
specific poor performance. Some of the investments will earn positive
return and few of them will give loss and over all chance of making net
profit becomes high.
5.Do not rely solely on stockbrokers:
Do your own homework. Remember, the stock broking company is also predicting
and providing tips. Once you make your homework done, check with the
predictions of the broking companies. That will give you more confidence.
6.Do not be greedy:
People invest in stock market with an objective to earn more return than
fixed income securities. This is the place where one can earn outstanding
return. But these are risky assets. If one does not understand the risk
of holding any share then above average return makes the investor greedy,
and that leads to wrong stock investment decision.
Result is loss. So, investors should restrict impulsive decision-making.
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Author Bio: The above article may be freely republished in any media if
the author biobox and the links are kept as it is. Edgar Davids is the
contributing author to the Shriram Insight.
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other query, feel free to ask the helpdesk.
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Tags: news item, net profit, guesswork, poor performance, investment decision, sound investment, sound decisions, fixed incomes, single company, investment opportunity, equity investment, stockbrokers, investment destination, potentiality, gdp growth, indian stock market