Share market


Shares or equity are risky, it's a threat to savings, it's bring uncertainty..
Is it true ?
We should make strategies for earning long term profit from equity and explore its potential for making money.
First suggestion a portfolio should be well diversified and one should invest in important industries of a nation, which are the pillars of nations economy and has much lesser chance to crumble down . Try to invest in the best companies of a industry which has potential to rise when the industry will hold strong in the business cycle. Diversified portfolio helps to set off the loss from a share of a company if any, as it not possible that almost all important industry will suffer. If there is a loss from one industry there will be a profit from another.
Due to business cycles and fluctuations in scenarios in economy and politics some  important industries of a nation will perform well some won't, buy when these industries are at their lows and sell them when they are highs.
 Due to changing trends in an economy (national or international) and business cycles the industry trend will vary and this will give fluctuations in share prices for their respective industry, make the most use of fluctuations. To make the most use of fluctuations, study the background of the company, study its Balance Sheet (notice how much profit it has made in past few years, study how rich is the cash reserve, how good is the liquidity and solvency of the company,by studying the position of current assets and liabilities).
Study the future collaboration and prospective growth of the company which are directly proportional to share price in future. Study is needed to analyze the future trend of demand of goods and services in world economy or in import and export, the respective industry will flourish and hence share price of that industry will increase due to its growth.
Analysis should be done on the profit earning capacity of the company by keeping the above points in mind. More the profit more the share price. Price Earning ratio should be checked,dividend policies should be monitored.

For minimal risk invest 60-65 % on large cap, 30-35% on mid cap and 10-5% on small cap. Investing in a company should be well researched keeping in mind to invest in shares who's price a more fluctuation then stable ones.
This is in short an elementary outline or guide for investing in equity.
Study more . Earn more and have fun.

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