|How to be a successful investor in stock ?
|How one can be successful
to get more return from stock investment?, question of everyone.
To be successful investors apply the following ideas.
Know the "Stock
Exchange! , Build up confidence before investment.
must have gather experienced that the stock exchange is not
a casino ground, its purely a development matter of institutions
or the companies where there is your return expect to come
narrating with national-international economic and political
situation. If this narrator factors goes in negative direction
there is huge changes of erosion of capital investment. This
is why one has to see the duration when the above narrator
you think to get shape positively. After how long the economic
and political changes are reviving, in which situation are
you investing? Is the situation is favorable than go otherwise
keep stay out. Even in critical situation weather the company
will able to give profit or what is the aspect of company?
Such notes have to be set up in your mind. You know the stock
exchange is no more than gathering of companies which do suffer
in changes of business cycle. So in your nearest stock exchange
what sort of companies are mostly listed this differ lot accordance
their business stance. Building confidence is the first part.
2. Understand the risk on your on portfolio
One who does not see other respective investment opportunity
and know his/her money is going to freeze, it is really worthwhile
to step for stock investment. But to be honest your investment
period has to be not least months. Borrowed money used to
have higher risk as in the short period no one can expect
fast return. Higher interest borrowed money is even tipsy
unless the rate is not reasonable and for long term. You need
to understand first of all that the money is fresh or borrowed.
There is chance to save as well as earning possibility if
the borrowed money is utilized for long period with reasonable
interest rate. The next weather your money is essentially
is expected to use somewhere in near future or not! These
small things has to be aptly fit before investment.
3. Diversify in investment
The only answer is to be secure. You know
every business can not move in same way, where as in stock
exchange we can see sector wise different listed companies.
Sometimes one business sector used to face difficulties, at
this movement another sector price used to be strong. To be secured in entire your investment it is
good to invest in different company's share, but you need
to have study of different fields from where big potential
lies and put more stakes on that field. As little is your
investment little the return that is why with respective diversification
in investment there should also rationalize the amount.
Never, ever invest on a hot tip!
Whenever banking interest rates starts to shrink
movement when consumers are spending high, internal money
supply stays strong, investment areas starts competitive in
earning or lets say when you see the money has less purchasing
power usually stock exchange booms. In this movement economically
people used have money into their pocket means their confidence
of earning took speed and indirectly stock price shoot up,
to be known for we such economic adherent this is hot period.
What exactly period was in second half of 1999 till to end
2000. If you are studying economic development and starts
to find above development then don't enter into the stock.
Why?We will get few share even in huge investment due to higher
price the second thing is that there used to be very exception
room of price increase. In addition economic turn around is
very much possible due to the reason of overflow of investment
at such period.
Don't be greedy!Naturally
this sin is bad in every prospect.
After all above five basis tools it is most important to know potential
companies, isn't it?
Way to find out potential companies?
Reasonable evaluation: One
has to be able to evaluate a company in reasonable way based
in economic practice. Find out company, which is developing
rather faster than economic growth of a country. While evaluating
a company don't forget the security position. Is the price-earning
ratio's are below the average and so market price to book
value? If you see picture is rather positive than only be
sure that there is up trend share price potential of a company.
2. Low prices: Much you get shares in low
price better for you, higher a price of company is lower
the return. This is why find out low price and don't forget
to see the price development of last 52 week high at least
25% less. The more, the better.
3. Catch growing company: "Good
growth Search for strong growth momentum." Make
sure both revenues and earnings are rising- and are
likely in the future. This is a part where an investor
needs to watch.
4. learn balance sheet: If the company
balance sheet is not clean at that movement better stay
out. Are the expenses which they had shown is seen around
them or after the expenditure there strength has build
up in administration field and as well in other part
or is the money is flowing under their table. You know
the Enron and Worldcom scandal. Here in Nepal
change in their accountancy is most popular. Try to find
out the reality.
5. normal' Dividend
payers: In the last two year
how much dividend & has been provided by the company
and is possible for next two years to come? If the possibility
is there, in such a case it will be more helpful to stay
in marginal profit even the movement at such political
and economic surroundings. Companies that pay dividends
often have more stable earnings also which means price
increase potential is less that is why here in this point
either sell out such company share or stay neutral for
low returns if you wish.
.RAMSBAY is there.
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