How To Analyze Stocks of Banks
How to analyze bank stocks? it’s through stock market academy. It can analyze almost 90% of all stock’s within the market. But it cannot analyze bank stocks.
Analysis of banking stocks isn’t like analyzing stocks of other businesses.
Why? Because the business model of banks are different from other business. Hence, their financial statements also are prepared differently.
In simple words, the financial reporting of banks is different than other companies. The financial ratios which may analyze other stocks aren’t effective to research bank stocks. So if you would like to research bank stocks, do that first. My suggestion is, plow ahead and skim about the business model of banks. this may go an extended way in doing the amount crunching of bank stocks learn more in stock market academy. banks use some of our deposits to earn some money for themselves. In turn, the profits that they earn also are shared with us. How the share is done? By giving us return on our deposits in sort of interests (like 3.5% on savings a/c).
What happens to the deposited money in a savings account? The deposited money grows in size as they’re earning interest. Suppose the principal deposited amount is Rs.1,00,000. At rate of three .5% p.a. interest, the deposit will become Rs.103,500 after one year.
This is a win-win business model for each one (banks and us). How?
For People: Firstly, they’re getting an area where they will park their money safely. Secondly, they’re also getting an incentive to park their money in banks as their deposited money also will grow in size. How? As banks can pay interest on the deposits. Read: guide the way to economize.
For Banks: As banks get liquid cash from people, they will use this money to try to onward business and earn some profits. this manner banks are ready to cover their cost of operation. Moreover, banks also make some profit. Similar Reading: Business model of airports.
Depositors are happy, and the banking sector is additionally happy as they’re making profits.
How To Invest In A Falling Stock Market
Value investors are always prepared to invest in a bear market. Why? Because it is in the bear market that they make maximum profits. You can learn it in the Stock market institute.
Generally, there is a fear of a bear market because the majority lose money during this time. But value investors consider falling market as an opportunity to make big money. People like Warren Buffett treat the bear market as a time to grab quality stocks at an undervalued price.
It is also true that investing during the bear market phase is daunting. In times when all prices are only falling, convincing self to invest in stocks is not east and you can go to a stock market institute. As a general rule, when the index falls in a short period by -20% or more, it can be termed as a bear market. In fact, due to the prevailing pessimism around, the index continues to crash incrementally every passing day.
OPPORTUNITY IN A BEAR MARKET | STOCK MARKET INSTITUTE
In a bear market the environment is of pessimism. There are more sellers of stocks than their buyers. The majority prefers to sell their holdings whenever the index starts to fall. This gradually builds a panic situation in the market. learn these in stock market institute.
It will not be wrong to say that stock-selling is a reflex action triggered by the bear market. know more in the stock market institute, People are drawn to selling to prevent further losses. This is understandable. Why? Because when the market crash, the numbers are daunting. In year 2008, SENSEX fell from 20,000 to 8,500 levels (down -57%). Such massive and often irrational price falls make prices undervalued and offer an opportunity for investors.
LEARNING OF STOCK MARKET
There is no other way to make money available market, one must first learn the fundamentals . to find out the fundamentals one cannot simply attend a stock market training school and become an expert. One must follow the DIY strategy (Do-It-Yourself) to find out stock investing. When it involves stock investing, DIY is that the only alternative. Why?
Because on one side we’ve people for whom share market is like an alien world. On the opposite side, some people earn money in stocks as if it’s an easy job.
There has always been this divide prevailing among people, and this divide is merely growing. Why? Because, people that don’t understand shares, treat it as a roulette table. and other people whose skills to earn money from the stock exchange prefer to stay their knowledge as a secret. So how a standard man can learn and earn money in the share market? the solution is simple…DIY (Do it yourself). How? this is often where this text will prove its utility.
But there’s another limitation. What? Be able to give time, to find out & master stock exchange skills.
This is one of the most important steps in stock investing. What is stock investing for investors? “Buying good stocks at the right price, and then holding it for long term“.
Hence, to earn money in the stock market, a person needs to answer the following three questions:
- If this business is good: How to know if the business is good or not? One must go through stock market training. In fundamental analysis one evaluates the size of its business, future growth prospects, financial health, etc. Read more about fundamental analysis here.
- What is the right price to pay for this stock: What is the right price? Price at which one can consider buying a stock. How to know about it? By stock market training. If the current price is below the intrinsic value, it is the right price to buy a stock. Read more about the concept of the intrinsic value of stocks.
- How long should I hold it: Generally speaking, a stock must be held for the long term (more than 3 years). Period. But there can be aberrations from this rule. This aberration will come into play when the goal is reaching earlier [Please see the process flow shown above].
PROCESS OF INVESTING IN STOCK MARKET
Let its stock market investing or to earn money online, it’s essential to first understand the general ‘process’ of doing it. it’s also important to stay it simple. What this process does is, it defines the beginning and end, also identifies the intermediate steps. Following a process is an important ingredient of success in life.
What should be the method of investing available market and earn money online?
These five steps:
Research: regardless of how confident we are feeling a few stock, it can’t be bought without researching. the thought is, albeit Warren Buffett asks you to shop for a stock, don’t pip out without researching it yourself. Once you’ve got researched you can earn money online and is feeling confident about it, buy it. Read more about the way to do stock research.
Goal Setting: once you will do stock research, you’ll get a feel of what proportion a stock is undervalued. Suppose a stock which generally trades at Rs.100, is now trading at Rs.65. Upon research you found that the strength of its business is unbroken. Hence you’ll earn money online in the next 6 months, the stock price may rise to a minimum of Rs.75. Hence you set a goal of Rs.75 in 6 months (15% up from current price). Check my stock watchlist for clarity stock’s target price.
Selling: love it is vital to shop for ‘right stocks’, it’s equally important to sell those stocks at the right time. the way to know the proper time? When a stock reaches its goal (like we saw above), it’s time for it to be sold. don’t become greedy to earn money online. Sell the stock holding as soon because it reached its goal. Read more about the way to evaluate stock price.
Reinvest: this is often probably more important than all the above 4 steps combined. simply because you’ve got sold the stock, it doesn’t mean that you simply can spend this money. confirm that this redeemed money goes back to the first step (research). The idea is to reinvest and buy another good undervalued stock. Reinvestment allows one to require advantage of the facility of compounding returns.
How to make money in stock market in India
Why it’s essential to understand the way to earn money online in the available market? Because more people lose money in stocks than the other investment option. Why? A trademark answer is, “stocks are risky”.If stock is risky, why people still choose it? Because it also can generate high returns. How we will earn those high returns? By investing wisely available market.
HOW MUCH YOU CAN EARN MONEY ONLINE WITH STOCK MARKET?
There is a mutual fund called ‘HDFC Index Sensex’. In the last 15 years, this mutual fund has generated an annualized return of 12.9% p.a. What does it mean? You can earn money online.
Why people lose money in stocks: On a mean, our index (Sensex) has grown at a rate on the brink of 12.9% p.a. in the last 15 years. Then why many of us who invested in stocks directly (instead of an index), lost money? this is often because they bought the wrong stocks. What are the wrong stock? Stocks of bad business, or ones bought at the wrong price. the way to affect this ambiguity? we’ll know more about it during this article. Know more about how you can earn money online with stocks.
How to not lose money in stocks: For risk-averse people, who want to take a position available market, they will simply buy a mutual fund and stay invested for 10-15 years. there’s almost 99% chances that they’re going to not make a loss. Know more about index funds. For people that can take risks, their way to make cash is to devise a technique for investing available market. Read more about stocks here.So what you would like to do, buy index funds or direct stocks? People who chose index funds can make close to 12% p.a. in long term. This is a no-hassle investment.
Stock Market Trends
Have you ever checked out a stock’s price chart and got noticed the daily ups and downs? Yet, underlying these daily fluctuations may be a certain stock market trend. this will be seen over an extended period of your time.
Nailing this market trend is what technical analysis is about. As a technical investor, you’d check out historical price patterns and form an opinion about stock market trends. Accordingly, you’ll decide your course of action vis-à-vis a stock. this is often why understanding market trends is so important. which is what this section is going to be about—what are market trends; application available selection; the way to identify market trends, and the way to analyze them to form profitable investments.
WHAT IS STOCK MARKET TREND?
As we discussed in an earlier section, stock prices are often volatile within the short term. They don’t necessarily move during a line. However, as you zoom out and appearance at slightly long-term price patterns, you’ll discover a far better-defined market trend.
In general understanding, a trend is that the broad upward or downward movement of a stock market over time. Upward movement is named an uptrend, while those which move lower throughout your time are said to be during a downtrend. Investors have a bent of shopping for stocks that are seemingly during an uptrend and selling those in a downtrend.
WHY SHOULD YOU UNDERSTAND MARKET TRENDS
All the best things happen only with patience and determination in the stock market. Even if this sounds complicated, hold on and implement in your investments.
Understanding market trends is important because it tells you which stocks are expected to move up, and how much risk there is along the way. If you sell before the price hits its peak, you may lose out on good profits. Similarly, if you buy before the price falls to its lowest point, then you may make less profit when you finally sell it.
Major indices in INDIA
There are two major indices in Indian stock market: BSE Sensex and NSE Nifty.
The BSE Sensitive index of equity share prices was launched in 1986.
It compromises 30 shares and its base year is 1978-79 stock market. The major criterion for the selection of a scrip within the Sensex is large capitalization. Besides this criterion other criteria like the number of trades, the average value of shares traded per day as a percentage of a total number of outstanding shares, are considered for inclusion within the Sensex.
The recent revamp was on March 11, 2000 which came into effect on April 10. Certain scrips like India Hotels, IDBI, Tata Chemicals, and Tata Power were replaced by Satyam Computers, Zee Telefilms, Dr. Reddy’s Laboratories, and Reliance Petroleum. The stock market new economy sticks have now percent weightage within the index. The BSE Sensex was revised again on January 7, 2002. when the motorcycle major Hero Honda displaced Mahindra and Mahindra and HCL Technologies displaced NIIT.
Another index that has become very fashionable in stock market of your time is that the S&P CNX NIFTY.
The National stock market began equity in November 1994, and its volumes surpassed that of BSE during a very short span of your time. NSE and CRISIL undertook a venture, wherein they jointly promoted Indian Index. Services and products as specialized organizations to supply index services.
If a buy order for 1,000 shares goes through at Rs 102, then the market impact cost is 2%. If a buy order or 2000 shares goes through at. Rs 104 then the market impact cost at 2,000 shares is 4%. For the stock to be included within the S&P CNX Nifty it must trade the entire portfolio of Rs 2 crore at an impression cost than 1.5 percent on 85 percent of the tidings days. Nifty represents about 44 percent of the entire stock market capitalization on NSE. The S&P CNX Nifty may be a widely used indicator. Six index funds an index futures and options launched at NSE are supported by S&P CNX Nifty.
How to read financial news
How to read financial news
Finance news may be a daily feature in many living rooms, alongside the game and weather. For the more financially literate, it is a handy overview of stock market movements and economic developments. But it doesn’t need to be that way. Here’s a fast breakdown of what finance news is all about.
The market and therefore the economy aren’t an equivalent thing. it’s only one of the markets that structure the economy, just like the housing market.
While the market is taken into account a number one indicator of the economy, the 2 don’t share a dependable relationship. you should not extrapolate what the economy will do tomorrow from what the market does today.
Broadly speaking, there are two *segments* within the financial market.
The financial market comprises of the cash markets* that affect the short-term lending and borrowing of funds and therefore the *securities or capital markets* that enable long run transfer of funds using debt and equity instruments.
The financial market isn’t just a provider of funds..but also liquidity and exit options for the participants.
Now, allow us to see the structure of the financial markets within the Indian context
Banking system
The *banking system* acts because the intermediary to channel funds to economic enterprises. Banks also provide a secure system for settling financial transactions. RBI is that the *regulator of the banking sector* impacts stock market. it’s the bank licensing and note-issuing authority. It also controls the credit and monetary activities within the economy.
Securities Market
The *securities market* provides the structure for businesses to boost funds through the difficulty of securities. Two segments in this:
1. The *primary market* also called the new issue market, is where issuers raise capital by issuing securities to investors.
2. The *secondary market* also called the stock market, facilitates trade already-issued securities. The stock exchange may be a very busy place.
Buying and selling in Stock Market
Buying and selling in Stock Market
Buying and selling of shares isn’t almost research and identifying a stock in stock market. it’s also about actual execution of the trade. you want to execute the trade the simplest possible manner and once that’s completed then the follow up actions must be taken like monitoring the position, tallying the position together with your final contract note etc. you’ll buy either online or offline.
Process of buying and Selling Shares
Opening your trading and demat account
If you have already got a trading and demat account, then you’ll immediately go and begin buying the shares. In case, you are do not have a trading and demat account, you would like to open a trading and demat account. SEBI rule don’t permit you to trade in stock market without trading and demat account. you furthermore may got to map a checking account to the trading and demat account.
Placing an offline versus online order | Stock market
You can buy and sell shares either offline or online. you would like to make a decision which mode you’re easier with. If you favor to take a seat within the broker’s office or call up your broker and trade then offline is that the mode for you. If you’re easier with the laptop or the mobile then online is that the mode for you.
Deciding on the sort of order to be placed
There are differing types of orders and you would like to work out which order to put . during a trending market a order will work best whereas during a volatile market a limit order are going to be an honest choice. just in case you don’t want to be seen on the screen for too long then an instantaneous or Cancel (IOC) order can work best. the entire purpose of fine tuning your order placement is to make sure that you simply get rock bottom possible price once you are buying the stock and therefore the highest possible price once you are selling the stock.
Executing the order and monitoring it…
Once the order is placed, you would like to trace its status within the order book. The order book consists of your executed and pending orders. It also contains all of your orders placed as identified with a unique order number in stock market. Once the order is executed, it’s moved to the trade edition . The trade edition will offer you a thought of the worth at which the stock was purchased and therefore the average price.
Share Market Trading – A good decision during coronavirus epidemic?
Share Market Trading – A good decision during coronavirus epidemic?
April 28, 2020
Share Market has seen such falls since this Coronavirus has been declared as the health hazardous epidemic. But the question arises is their still opportunity for making money from share market. Ultimately in order to survive we have to earn money. And for earn money we have to find even the slightest possibility.
And that is exactly what trading in the share market fulfills. The most widely participated segment of the stock market is the intraday trading, which allows even a person with an investment of 10,000 to start trading. The only requirement is that it should be taken very seriously. The moment this stock market trading is treated as gambling or something to satisfy that adrenaline rush. You will end up making losses and in no time you will see yourself in the trap.
Sometimes hearing this about the stock market makes anyone doubt that, it is just theoretical. But the truth is not it. Just imaging, you are a person earning 30000-40000 per month, which is usually taken as a good salary in India. But the hard part is to have your desires fulfilled with that amount. No matter how much you earn there will be some unavoidable spends which will find their way to your pocket.
So in these circumstances you have to take a step to earn more. Not just more but that can be an income which you have full control over. So intraday trading makes it possible. Just do some research about the market, arrange your investment and you are good to go.
We have another blog showing that “How a beginner can start trading in the stock market”. Now coming back to the topic, what about the coronavirus epidemic. Is it not ruining the earning chances of people? Because logically to earn from the share market the particular company should perform well. BUT, that is where intraday trading gets ahead of other investing methods. Short selling a very common practice in the intraday trading, allows any investor to first sell the stocks and then buy them back earning a good profit.
Another common question which would come is, In this epidemic situation already the earning is low, how is it possible to take out a portion of the money and risk it in the share market? So it is simple, don’t start with investing in the share market, but invest in learning first. That will act as a key for you to earn later in the future.
So no matter if the situation of the world is good or bad, you can always be adaptable. Make a proper mindset and start working for the betterment of your future and the future of those you care about. Everything is possible if you have the proper mindset and the strength to take the risk.
We at venteskraft provide stock market training through a practical approach. Venteskraft even provides each person with a financial trainer which will monitor your performance throughout the duration of the membership. Check out our website for more information.