Securities - Shares

Many people say that share market is a very risky place and one can only lose money in it and not gain anything, et al. But, there is a difference between trading and investing. If one invests money in the share market, there will not be any loss provided the money is invested in the shares after proper analysis. In 'Day Trading' i.e., buying and selling on the same day, one tend to lose more than gain. Further, the profit will also be not much, if any. Sometimes, the Share broker may earn more in brokerage than the actual profit of a Day Trader. So it is always advisable to invest in the share market rather than trading. One should keep a portfolio rather than investing all his/her money in one or two scrips. One should not keep all eggs in one basket. SIP in stocks buying is also advisable. One can buy shares in small quantity in regular intervals which will help in price averaging.

One should study the financial health of the company thoroughly and then invest in the scrip. One can go from micro level to macro or macro to micro while doing the analysis. Global economic/political conditions, national level analysis, industry performance, scanning the target company for all aspects starting from its management to financial health may be studied in Macro to Micro level analysis and vice versa in case of Micro to Macro. After the analysis is done and the investment is made, one should not get panicky about the minor ups and downs of the share price. A labour unrest and the temporary closure of a manufacturing unit of a company may also lead to the beating of share price of a company. Example, closure of one of the units of Hero Motors (in 2013 - I think it was its Haridwar unit) when their share price was around Rs.1,500/- and the share price was beaten in the market and now you know where are the share prices of Hero Motors. I suggested this to one of my friends at that time. He came back after some time and told me that he made investment in Hero and was happy about its appreciation. His investments would have made him a HERO !!!


Look around everywhere before you Leap.