You Buy and Price Falls, You Sell and Price Rises !

One say’s “I bought “XYZ Company” at Rs.2200 and immediately after I bought the stock price dropped to Rs.2000.” I feel sad. Another comes with a different version “I sold “XYZ Company” at Rs.2000 and it went up to Rs.2400 same evening” I made an imaginary loss of Rs.400 per share.

Solution:
You can buy more shares @ Rs.2000 and reduce your overall buying cost. This has to be done only if believe in the fundamentals,management and the future prospects of the company.

To do this you need to keep money ready.whatever money you have and want to invest,split it into two parts. Then keep 50% cash aside, only invest with other 50%.So if need to buy more of any stock when the price falls you have ready cash.

Also now if you have 200 shares of XYZ Company 100 @ Rs.2200 and 100 @ Rs.2000.Then the price goes up to Rs.2400. Sell only 100 of the shares.Then if the price further shot up, you have some shares to sell And participate in the rally to make money.

Next, You sold the share and the price went up. The solution to this is never sell all the shares at one time. Sell only 50% of your shares.So if he price goes up later you still have the other 50% to sell and make profit.

The golden Rule is to first do your own analysis of the stock before investing and buy on tips.

Also invest only in companies which declare dividends every year. To be sure that you are not investing in loss making companies.

Every Market expert advise to do your stock analysis before investing in the stock market. But nobody tells you how.

Well in my next article I will write about how to do stock analysis using various tools such as financial ratios and by checking the track records of the companies you plan to invest in.

P.S: If you are not Indian then replace the Rs. into your own local currency to understand the article

Share and its requirements

Posted on January 20, 2008 - Filed Under Share Market | Leave a Comment

Share and its requirements

In a nutshell share is nothing but the capital investment or the ownership of the company divided into a number of small parts and that is called share, a person who is holding a part of the share of a company is said to have that part of ownership of the company or that part of investment made by him in the company.
Share market is a place where these kinds of shares are being bought and sold and they are NSE and BSE which almost act as the back bone of the economic of our nation.Now a days the physical presence of a person in the market to trade has gone down a lot due to the massive advancement of internet any person can sit in anyplace in the world and can join trading and do trading.Normally when you want to buy or sell any share which you wish have to place your order through a broker or on their own thro on line trading.whenever a share is purchased that will be sent to the person either in physical or in demat form and now sending in physical is almost nil as it is totally taken over by demat form.
Demat is nothing but the short form of Dematrialization by which a person who bought the shares can get his shares converted into electronic form and that his account of this form will be maintained in the Depositary Participant in other words the DP.
DP’s are nothing but those companies or the organisations that are involved themselves in this kind of services , they can be banks, financial institutions and brokers.when any body who ever interested in involving himself in trading or in investment should posses a Demat account and for opening the Demat account he should go to any DP and get himself an account,and it is very simple also, and once a demat account is opened all the investment made by the individual and all the shares on his hold will be shown in his account.So botheration of holding those share certificates personally and physically is being eased out by this .
“As per the extent rules of SEBI to buy and sell shares one must possess a demat account and that is COMPULSARY”.
Allmost all the banks are now Dp registered , so you can very well open a Demat account from them, and to open a demat account the following documents are needed:
1.PAN card.
2.Voters ID for identification purpose
3.Ration card for address verification
4.IT returns
some time if you not able to produce 2,3,4 you can produce other documents like passport, driving license, telephone bill, electricity bill, or employee identitycard etc as these will serve the same purposed as stated above, but to open a demat account it is compulsory you should possess a “PAN card”.
Once when you open a demat account you will be provided with a BOI number ie.,”Beneficial Owner Identification”number, with which all the transaction by the individual will be done here after.

Online Trading

Posted on January 20, 2008 - Filed Under Share Market | Leave a Comment

Online Trading

Now a days the need for an extra income and the need for the luxury among people had paved way for looking for more no of chances available for earning and the first and foremost of them all seems to be online trading,The market has become more accessible, but that doesn’t mean you should take online trading lightly. In this article, we’ll look at the different types of online trading accounts, as well as how to choose an online brokerage, make trades and protect yourself from fraud.
Now, plenty of “common” people own stock. Online trading has given anyone who has a computer, enough money to open an account and a reasonably good financial history the ability to invest in the market. You don’t have to have a personal broker or a disposable fortune to do it, and most analysts agree that average people trading stock is no longer a sign of impending doom.
Before we could go for a jump start to the diffierent types of online trading aspects it is better for us know about some basics of online trading. let’s take a quick look at the basics of the stock market.A share of stock is basically a tiny piece of a corporation. Shareholders — people who buy stock — are investing in the future of a company for as long as they own their shares. The price of a share varies according to economic conditions, the performance of the company and investors’ attitudes. The first time a company offers its stock for public sale is called an initial public offering (IPO), also known as “going public.”
Then, the profit made by that business is being shared among the share holders in the way of dividents,normally the price of the share of a company varies with certain aspects,mainly, according to economic conditions, the performance of the company and investors’ attitudes.In this the stocks that pay frequent income by way of dividents are called income stocks, the stocks that a company which reivests for the growth of the company furthermore are called growth stocks.
Here, the broker is a person who buys and sells these shares through an exchange for a commission charged from the consumer to do so,he may do this on the trade floor or or can make trades by phone or electronically.
How to start an online trading with this much information we will see in the next blog.

Share and Stock Market Rules

Posted on January 20, 2008 - Filed Under Share Market | Leave a Comment

Share and Stock Market Rules

It’s been almost a month now, but I am back, they say that Indian stock market is rising and there is very good future for almost all investors but still i could see a lot of people fail and struggle in trading.The basic cause for this failure is not abiding yourself with rules, what ever be the situation you should not forget the basic rules, basic rules are almost the same to almost all markets and in all situations.

When you are investing in market donot enter the market with certainities, think always in terms of probabilities, certainities will never help in share market.

When you want to invest for long run see for the fundamentals of the company and invest but when you want to invest for short term and day trading you should see for the technical analysis .

Never bring your emotions inside the market emotions cannot be strategies and they will never help in your investing.

Never try to go against the market that is not recommended even by the big guns

Keep watching your holding always you just cannot hold a share which is not at all useful to you or going against the probabilities, be ready to gain or be ready come out of the market immediately when you smell danger.

Try to analyse your stay in the market and the business done by you atleast every month and learn the plus and negatives, reviewing your lose, and profit will help you to plan further in the coming month.

Share Trading World - Stock Market