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ShareMarketIdeaS

Place for analysis and strategies to earn better in stock markets

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    ShareMarketIdeaS Admin
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    BEGINNERS CORNER Empty BEGINNERS CORNER

    Post  ShareMarketIdeaS Admin Tue Mar 03, 2009 9:04 pm

    How to Start Investing in Shares

    To start investing in share trading, we have to open an account called “Demat account” which is called as dematerialised account.

    What is a Demat Account?


    It is an account which can be compared to a bank account wherein here your shares are in electronic form with its respective value (either purchase price or selling price). Don’t get bogged down by high fundas like “Demat Account”. In simple words, instead of having shares in paper form we are having it in electronic form .That’s it! In early days, stocks and shares are traded in paper form by people gathering in stock exchanges and showing signs of company and price through signals. Even now Chicago stock markets operate in this way. The highest bidder or the one who is quoting for highest price will be awarded the shares. Now you can trade electronically and so you need an electronic format and hence demat. The reverse of “demat” is “remat” and it is not our concern now.

    What should I do to open a Demat Account and where?

    You can open a demat account with depositary participant (DP). You can compare this DP with a bank. They will charge you for every purchase and every sale you make. To find a list of DP you can type “Depository Participant” in the search engine and find a one close to your location. Some of the notable ones are India bulls and geogith. And most of the banks like ICICI also provide you this option.

    What should I have to open a Demat Account?


    * You should have a three months bank statement.
    * PAN Card.
    * An identity proof.

    These depository participants will also advice on stocks and shares. However I personally advice you to have market watch before investing
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    BEGINNERS CORNER Empty Some basics for better understanding of markets

    Post  ShareMarketIdeaS Admin Tue Mar 03, 2009 9:06 pm

    What are Equities?
    Equity is a share in the ownership of a company. It represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company increases. The terms share, equity and stock mean the same thing and can be used interchangeably. Holding a company's stock means that you are one of the many owners (shareholders) of a company, and, as such, you have a claim (to the extent of your holding) to everything the company owns. Yes, this means that technically, you own a portion of every piece of furniture; every trademark; every contract, etc. of the company. As an owner, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock.

    Who is a Stock holder?
    Any person, company, or other institution that owns at least one share in a company.
    A shareholder may also be referred to as a "stockholder".

    What is Online trading?
    Buying and selling shares via internet is called Online Trading. It is a very safe and secure way ti trade in markets.

    What is a dividend?
    A dividend is a payment made by a company to its shareholders. It is a part of a company’s profits distributed to those who hold stock in the company. A dividend is typically paid in a fixed amount every quarter in cash. Dividends could take other forms such as property or stock. Unlike interest payments, dividend payments must be approved by the company’s board of directors before each distribution. Companies will pay dividends to their shareholders with a portion of their profits as an alternative to investing those profits back into the company.


    What is Bull and Bear in markets?
    Bull - An investor who thinks the market, a specific security or an industry will rise.
    Bear - An investor who believes that a particular security or market is headed downward. Bears attempt to profit from a decline in prices.

    What is Fundamental analysis?
    A method of evaluating a stock by attempting to measure its intrinsic value. Fundamental analysts study everything from the overall economy and industry conditions, to the financial condition and management of companies.

    What is Technical analysis?
    A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity
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    BEGINNERS CORNER Empty Creating Your Investment Plan

    Post  ShareMarketIdeaS Admin Tue Mar 03, 2009 9:10 pm


    You have financial goals. You would want to save for retirement, your child’s education, or you have plans to buy a new home or car. To attain these goals requires more than just earning & saving regularly. You need to make sound investment decisions—decisions you can make now.Where should you begin? Stocks, bonds, cash investments.

    Large, small, and international companies. The choices may seem overwhelming, but they’re really not. Becoming a savvy investor is easier than you might think: You don’t need to be a financial wizard; you do need to learn to do just a few things right.

    Identify Your Goals and Time Horizon

    Before you can create an investment plan, you need to know what you want to do with your money and when you’ll need it.Your time horizon is important because your investments will rise and fall in value throughout the time you own them. The longer your time frame, the greater your ability to ride out the ups and downs of the markets.Because you won’t need your money right away, you can more reasonably select investments whose values fluctuate in the short term in hopes of earning greater returns over time.

    Choose Your Asset Allocation

    Of the three primary asset classes stocks, bonds, and cash investments stocks historically have turned in the highest long-term returns, although with the widest short-term price swings.Before investing, take time to understand the basics of each asset class. After you understand and make up your mind in choosing your asset class, Go ahead and invest in them.

    Spread the Risks Around

    Financial experts agree that you should hold a mix of investments from among the asset classes to help reduce the volatility or fluctuation in market value of your portfolio. That’s because diversification spreads the risk around: Subpar performance in one area often can be tempered by good performance in another. Of course, keep in mind that diversification does not guarantee
    a profit or protect against a loss in a declining market.

    Know When to Change Your Mix

    Marriage, birth, an inheritance, the death of a spouse. Life-changing events can certainly alter your financial situation and give you sound reasons to change your investment mix. In addition, as time passes, the time horizon for each of your investment goals shortens: Long-term goals,become intermediate-term goals and then short-term goals. Over time, market conditions can also create a need to make a change. For example, if stocks have been doing particularly well for a long period, you may find you have a higher percentage of your assets in stocks than you had planned. You may need to make an adjustment to bring your portfolio back to your target asset allocation.

    Stick To Your Action Plan

    Try to stick to your adopted plan and keep investing regularly. make investing a regular habit. Dont give up during difficult times. Challenges are always part of life. Face them and win them. You will definitely accomplish your financial goals one day.
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    BEGINNERS CORNER Empty USEFUL LINK FOR BEGINERS BASICS

    Post  ShareMarketIdeaS Admin Thu May 21, 2009 2:04 pm


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