Introduction
Importance of investing in stocks
Stocks helps you to achieve your specific goal so, its necessary to have a goal for your investment. Stocks is a shared portion of promoters which they sell in the stock market, Once it will live on Exchanges it will vary on the basis of supply and demand.
On the other hand if you make your portfolio more diversify then it will give you a compound interest which will direct affect on your portfolio.
Investing in stocks gives you a equity ownership, company voting rights and dividend income. Moreover, If you hold your investment minimum more than 1 Year then it gives you tax advantages like LTCG (Long Term Capital gain Tax), Dividend Tax Rate and Tax Deferred Retirement Account.
Basics of stock Investing
Stocks is also known as share, you buying a share of company i.e. you buying certain percentage of that company. there is Stock Exchange to regulate the stocks and in other words it controls companies and there shares for supply and demand.
Stocks price might vary on a basis of market sentiments, economic indicators and company performance this factor causes on stock price of the company.
Selecting Stocks
Selection of stocks is one of the complex work in finance. While choosing stocks, you need to research before you add it in your portfolio.
- Evaluate Company Financial – Quarterly Reports, Annual Report, Progress Report etc.
- Understand Business Model with Competitive Advantages.
- Examine Business Promoters and Industrial Governance.
There is 2 Traditional Method to Analyze stock, Technical Analysis and Fundamental Analysis. Understand stock price trend through technical indicators, entry, exit points, support, resistance etc.
Monitoring Your Investment
Continuous monitor your investment for your future goals and establishing benchmark. Try to analyze through multiple dimensions to identify Key Performance Indicator (KPI).
Manage frequency of your investment monitoring to evaluate company fundamentals, evolution contains comparisons of historical data includes sales, expenditures, loan, lend, borrowed money etc.
Moreover, It is very important to stay updated by market news and trends. Act on your investment portfolio by identifying and analyzing investment risks.
Conclusion
Investing in stocks is secure your goal and embark your achievements. It gives you a financial discipline and make literate to do smart investment.
Remember one thing, do investment in stocks align to your risk factor that how much you going to take risk which may cause your investment.
Conduct Market Research to make your diversify portfolio or before making any investment decision. Do mot make any decision by emotionally and short term market fluctuation.