| Buying and selling of shares happen in Stock | | | | what other people are using. This observation |
| market. A share of stock is the smallest unit | | | | will give you fair amount knowledge to those |
| of ownership in a company. If you own a share | | | | products and companies. Try to understand |
| of a company's stock, you are a part owner of | | | | business model of those companies. Gather |
| the company. If the company loses a lawsuit | | | | more knowledge on those companies. |
| and must pay a huge judgment, the worse that | | | | |
| can happen is your stock becomes worthless. | | | | Understand company's balance sheet & Profit- |
| The creditors can't come after your personal | | | | loss statement. Look for Profitability in |
| assets. There are two types of stock: Common | | | | business, cash in hand, auditor's report, |
| stock , Preferred stock . Most of the stock | | | | director report of the company. Try to |
| held by individuals is common stock . NYSE, | | | | understand the business model of the company |
| NSE, BSE etc..are few places where trading of | | | | and management team. Check return on asset. |
| stock happens. | | | | price/earning, return on equity and credit |
| | | | management of the company for last 5 years. |
| Why Investing In Stock Market? Investing is | | | | Check analyst report on forward p/e. |
| the proactive use of your money to make more | | | | |
| money or, to say it another way, it is your | | | | If all these are satisfactory, invest in the |
| money working for you. Investing is different | | | | company. Like these you need to find 6 to 9 |
| from saving. Saving is a passive activity, | | | | companies from 5 sectors like Energy, Oil and |
| even though it uses the same principle of | | | | Gas, FMCG, Service Sector, Biotech. |
| compounding. Saving is more focused on safety | | | | Pharmaceutical, Bank, entertainment, IT |
| of principal (the amount you start out with) | | | | industry and Insurance. |
| and less concerned with return. | | | | |
| | | | Your investment philosophy is to own a small |
| Investing in stocks means you are partial | | | | part of the company for 20 years. This |
| owner of a business. Whenever management | | | | ownership mentality will really give you |
| distributes profit as dividend you will get | | | | money in the long run. In the high bull |
| it. This is called dividend income - a best | | | | market do partial profit book regularly. If |
| strategy for passive income. This is best | | | | market sentiment is strong bull, buy option. |
| suited for retirement income planning. | | | | If market sentiment is strong bear buy put |
| | | | option. Use 5% of your money in option |
| As per history, if you compare Return of | | | | trading. Option trading basically used to |
| Investment of stock market to that of high | | | | hedge your asset and also make some |
| yield bond investment i.e. "junk" in every | | | | speculative gain. |
| decade for last 100 years, investing in stock | | | | |
| market outperforms others 8 out of 10 times | | | | In strong bear market, your blue chip |
| by a fair margin. If your investment horizon | | | | companies can generate good income if you use |
| is 20 years, statistically return of your | | | | covered call option regularly. It's not |
| stock portfolio will at least beat inflation. | | | | difficult to get 40% p.a. ROI by writing |
| | | | Covered Call Option. |
| How you Should Invest in Share Market? | | | | |
| | | | Money Management tricks for you to ride Bear |
| Budgeting eats your time. Instead of | | | | - Bull of Stock Market |
| following complex and boring expense | | | | |
| tracking, you simply follow the financial | | | | 1. Never investment more than 50% of your |
| strategies of pay your self first. You should | | | | savings in stock market 2. It is necessary to |
| investment at least 30% of your savings in | | | | invest in speculative investment for big |
| blue chip companies and 20% to high dividend | | | | money but never invest more than 10% of your |
| yielding stocks. On Line Investing in stock | | | | portfolio. 3. Get out of loss making |
| market is the best way to invest. | | | | investment. It will protect you from bigger |
| | | | loss and the loss you can offset against your |
| How to do Portfolio Management in stock | | | | profit in your tax return. 4. Do not make buy |
| Market? | | | | decision out of greed. 5. Do not take sell |
| | | | decision under panic 6. Understand the market |
| You should carefully look around your daily | | | | and where you investment with clear objective |
| life. You will notice what you use daily and | | | | why you are investing. |