STOCK MARKET FOR BEGINNER

BEGINNER MINDSET TO INVEST :(how to choose a stock)

well as it seems very difficult to invest in the stock market and moreover to choose the correct stock, don’t worry it’s not that tough job to pick a stock, what is required is a correct mindset and stable temperament, even if you are a beginner it will be relatively easy for you to understand the business behind the stock and be able to analyze it.

in this blog, we will discuss the prominent points through which you can buy a stock of a company not just by speculation but by understanding their business.

WHAT TO BUY? HOW TO CHOOSE A STOCK

what are the characteristics quality an investor must possess in stock before buying it? in order to attain the kind of results the following investor wants? here we will discuss some important points that an investor must be aware of and should concern himself.

DISCUSSING THE POINTS TO BUYING A COMMON STOCK:
  • DOES THE COMPANY HAVE PRODUCTS OR SERVICES WITH SUFFICIENT MARKET POTENTIAL TO MAKE POSSIBLE A SIZABLE INCREASE IN SALES FOR AT LEAST SEVERAL YEARS?

first, we just cannot focus on companies that just have great sales reports once or twice in a decade these are just speculative bargains for traders, rather than we must be focused on the futuristic capital growth of the company, the companies which have shown consistent growth from decade to decade.

what we must understand is no company grows for a long period of time just because it is lucky. it must have and continue to keep a high order of business skills.

  • DOES THE MANAGEMENT HAVE THE DETERMINATION TO CONTINUE TO DEVELOP PRODUCTS OR PROCESSES THAT WILL STILL FURTHER INCREASE TOTAL SALES POTENTIAL WHEN THE GROWTH POTENTIAL OF CURRENTLY ATTRACTIVE PRODUCT LINES HAS LARGELY BEEN EXPLOITED?

to get the surest route to financial success the following company must have consistent gains over 25 years. companies that have a significant growth prospect for the next few years because of new demand for existing lines, but which neither have policies nor plans to provide for further development beyond this may provide a vehicle for nice one-time profits.

  • HOW EFFECTIVE ARE THE COMPANY’S RESEARCH AND DEVELOPMENT EFFORTS IN RELATION TO ITS SIZE?

It is a simple task for management to bring close relations between research, production, and sales.

  • DOES THE COMPANY HAVE AN ABOVE-AVERAGE SALES ORGANIZATION?

it is the making of sales that is the most basic single activity of my business. without sales, survival is impossible. it is the making of repeat sales to satisfied customers that is the first benchmark of success.

  • DOES THE COMPANY HAVE A WORTHWHILE PROFIT MARGIN?

From the standpoint of investors, sales are only of value when and if they lead to increased profits.

the only reason for considering a long-range investment in a company with an abnormally low-profit margin is that there might be strong indications that a fundamental change is taking place within the company.

now when such internal changes are taking place in a company that suggests the right type of long-range investment.

  • WHAT IS THE COMPANY DOING TO MAINTAIN OR IMPROVE PROFIT MARGIN?

the perfect stock purchase does not depend on what time the stock has been purchased. rather than it depends upon what gets to be known about it after the stock has been bought.

therefore it is not the profit margins of the past but those of the future that are basically important to the investor.

companies worthy of investment interest are those that will continue to grow sooner or later a company will reach a size where it just will not be able to take advantage of further opportunities unless it starts developing executive talent in some depth.

WHEN TO SELL A STOCK AND WHEN NOT TO? HOW TO CHOOSE A STOCK

there are many good reasons why an investor might decide to sell common stock. according to analysis and research there exist three most important and prominent reasons to sell a common stock

the basic reason that is obvious to anyone is this, when a mistake has been made in the original purchase and it becomes increasingly clear that the factual background of the particular company is, by a significant margin, less favorable than originally believed.

the problem regionally occurs since due to the poor handling of this type of situation and it shows that it gets mostly dependent on emotional self-control. and to some degree, it also depends upon the investor’s ability, to be honest with himself.

any investor must be well-focused to leave a tremendous margin of gain as well, this is particularly true if a mistake is recognized quickly. when this happens, losses, if any, should be far smaller than if the stock bought in error had been held for a long period of time. even more important the funds tied up in the undesirable situation are fixed to be used for something else.

which if properly selected, should produce substantial gains. however, there is a complicating factor that makes the handling of investment mistakes more difficult. this is the ego in each of us. none of us likes to admit to ourselves that he has been wrong.

while losses should never cause strong self-disgust or emotional upset, neither should they be passed over lightly. they should always be reviewed with care so that a lesson is learned from each of them.

if we understand the basic elements that cause a misjudgment of a common stock purchase thoroughly understood, it is unlikely that another poor purchase will be made through misjudging the same investment factors mentioned above.

ENDING? HOW TO CHOOSE A STOCK

we have discussed some of the basic points about investing and how to choose a common stock, to move on further with the concepts of buying stocks any investor can proceed with a book named ” COMMON STOCKS AND UNCOMMON PROFITS ” ~PHILIP.A.FISHER.

AND IF YOU WANT TO GET CONSULTANCY REGARDING BUYING STOCKS OR GENERATING A PORTFOLIO DIVERSIFICATION THAN VISIT bridgenile.com

Precisely talking about the investing theory of the share market we hereby come to the conclusion that it is one of the most important fundamental aspects of human life for survival, the demand for a financial solution is hugely pointed for the upcoming years of men’s life since almost on an average in India and rest of the world the life expectancy is approximately 68~70 years we expect that a person to live for that long needs finance and the more importance we give to the finance of first two phases of our life it becomes easier for the later half.

Coming to finance (SHARE MARKET) or we can say investing in the share market, some of the basic and relevant concepts are seen :

  • FINANCIAL SECURITY
  • FINANCIAL PLANNING
  • FINANCIAL INVESTING

Normally in India most of the population is interested in “LAND” and “HOUSES” for trading thinking it to become an investing segment ( THE VERY OLD TRADITIONAL MENTALITY) or some selling off their land when its necessary for their personal emergencies, these scenarios occur when there is lack of financial security & planning.

Let’s just understand the basics of finances :

FINANCIAL SECURITY

Financial Planning

We normally talk about finances very less in the majority of the segments in India, when we use to be very young the very first rhyme probably everyone studied is ” EARLY TO BED AND EARLY TO RISE, MAKES A MAN HEALTHY – WEALTHY AND WISE ” there we observe that from our very basic era, we had the main focus on HEALTH first, I think everyone knows it and very few has a determination of solving it or consulting on it.

Basically, when it comes to the world of insurance a person commonly in India thinks of an endowment policy at its utmost stage, again coming to the world of security is complete or shall we say huge loss since the endowment policy( the policy in which a person pays a continuous deposit for a long tenure and eventually gets a return of around 7-8 % at the time of maturity ) as it cannot compete with the inflation of growing economy and the person makes a loss statistically but eventually getting the return after 10 years or so the person forgets about the loss or never calculates it.

Before beginning to invest in a share market a person must be financially secure that means if a person invests a certain amount of his life in a SHARE MARKET or any other segment of the Indian economy and if any serious condition the emergency comes up then the first thing he or she does is sells out their share and goes for the critical health conditions, now this was literally not required if the person would have taken some general and planning insurance which are unbiased, but the best thing about insurance is ” it is not available at an instant or when needed” we have to plan for the insurance of ( HEALTH AND TERM ).

HEALTH INSURANCE: It is one of the most prominent and urgent insurance every single person must avail themselves for themselves and their family, let us understand what actually health insurance is – it is basically a contract where an insurance company provides medical coverage. It covers medical expenses incurred on hospitalization, surgeries, daycare products, etc. A health insurance policy either reimburses the medical costs or offers cashless treatment if taken properly, there are many different categories of health insurance namely:-

  • Individual health insurance
  • family health insurance
  • critical illness insurance
  • senior citizen health insurance
  • Top-up health insurance
  • super deductible policy
  • hospital daily cash insurance
  • personal accident insurance
  • medical insurance
  • group health insurance
  • Disease-specific insurance
  • ULIPS’s

Why is health insurance important?

  • Health insurance provides financial assistance and places that insure individuals, financially assistance during any sort of medical emergency.
  • Buying a health insurance policy will help you With tax deductions as it is listed under section 80D of the income tax.
  • Once you buy the health insurance policy worrying about the treatment expenses will be covered by the insurance company so as a result, it becomes your investment plus savings benefits since you do not have to use the invested amount that you had invested in SHARE MARKET.

Things to look after when you buy a health insurance

  • Before buying any type of health insurance policy, it is essential to look into the deductibles involved in that policy, a deductible is an amount that is to be paid by the insured as a part of a claim whenever it arises, and the rest of the amount is paid by the insurance company.
  • A person must be very conscious about choosing and policy must make sure about the exclusions in terms of the policy is a provision that eliminates coverage for some type of risk. A few common exclusions in most health insurance policies include pre-existing diseases, pregnancy, cosmetic treatment, medical expenses to treat injuries, alternative treatments, lifestyle-related diseases, limitations of hospital costs, and diagnostic tests.
  • Different health insurance plans offer different renewability options, so a person must be very cared full while buying health insurance.
  • While buying any insurance policy, a buyer must choose the insurance company that covers the widest network of hospitals on their list.
  • The individual should pick up an insurance company that provides a fast claim settlement ratio.

covering all. In these cases, we get a short-sighted idea that how and where to buy the insurance and it is necessary against emergencies, so before investing taking health insurance is a must.

TERM INSURANCE:- Term life insurance or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term after that period expires, coverage at the previous rate of premiums is no longer guaranteed an the client forgo coverage or potentially obtain further coverage with different payments or conditions. In the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is typically the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

term insurance can be bought from any plan making sure that it generates all the benefits and disclosure, more preferably these two insurances are a must for one individual when comes to financial security and before investing in SHARE MARKET.

FINANCIAL PLANNING

Most people don’t take the time to consider their complete financial picture and create a financial plan. And for those who do, it often stirs up all kinds of emotions. It’s big, it’s scary. I have been there, I get it. But now that you’ve done it, take a moment to savor your victory and ask yourself this how do you really feel about your plan?

From a very early age, we have been taught only one thing and that saves money so that it becomes helpful in the future but that’s just only half part of or we can say it’s partially true the full sentence is ” SAVE AND INVEST THE DIFFERENCE ”

SAVE MORE AND INVEST THE DIFFERENCE;- The first way to speed up your plan is to save more and invest those savings for compounding growth. (after this sentence most probably everyone will think that it might not work since they have already tried to save as much as they can )

Like everyone the idea of planning how to spend my money so that it gives me the most joy and happiness but also ensures my financial freedom long term.[ As it has been statistically proven that little things can make a big difference long term they add up to surprisingly giant numbers ]

THE BASICS OF FINANCIAL PLANNING START FROM THE VERY MOST FUNDAMENTAL WORD OF SAVINGS

SOME MINDFUL SAVINGS:-

  • Our first brainstorm would be to eliminate or reduce to cut your expenses. car insurance, cellphone bills, lunch money, and movie tickets. think about where you can make changes.
  • how much do these items or activities cost? just calculate how many times per week you indulge in this expense and take a reality check snapshot.
  • just focusing on the needs and not on the wants.
  • Just think about what it would feel like to have absolute financial freedom.

To proceed with the savings sector the primitive sector of focus is required heavily —

” TRY NOT TO BECOME A MAN OF SUCCESS, BUT RATHER TRY TO BE A MAN OF VALUE ” ~ ALBERT EINSTEIN

After the savings sector the best time to get introduced is to the share market, when the markets are going up and up and up, investors can be mesmerized by their returns. Everybody’s seduced by the possibility of growth, thinking it’s the probability of growth tarts that they get into trouble. As a result, they pour the majority or all of their money into investments that fit into the risk/growth bucket- not just 70% but sometimes 80%,90%, or 100%. Some even borrow money to make investments that they believe are going to go up forever until they don’t.

And because of poor asset allocation, with too much of their money riding on one horse, they lose it all or even end up in debt .(for extra unbiased decisions visit www.bridgenile.com)

FINANCIAL INVESTING

Just by starting to invest in SHARE MARKET, you are just not merely a consumer you had decided to become an investor, now you are willing to commit a percentage of your income to save and invest in freedom fund and you’ve automated it. Anybody can become wealthy, the secret to wealth is asset allocation which is how you stay wealthy ( asset allocation – stocks-SHARE MARKET-, Mutual Funds, bonds, commodities, or real estate).

“I DON’T GAMBLE, BECAUSE A HUNDRED DOLLARS DOESN’T GIVE ME GREAT PLEASURE. BUT LOSING A HUNDRED DOLLAR PISSES ME OFF” – ALEX TREBEK

REMEMBER! You can also lose everything you’ve saved and invested. So whatever you put in your Risk/Growth(SHARE MARKET) Bucket, you have to be prepared to lose a portion or even all of it if you don’t have protective measures in place, these circumstances are so much more relatable to life including markets, runs in a cycle, it is definite that there are going to be up times and down times.

And the persons who invest in a particular Asset while it’s on a roll be it real estate, stocks(SHARE MARKET), bonds, commodities, or whatever, and think the party will last forever because ” this time will be different ” should get ready for a rude awakening. The great investors in the world say that whatever got your attention and whatever your favorite investment might be, at some point in your life, you can count on it dropping 50% to 70% in value, while there is unlimited potential for upside In this bucket, never forget that you could lose it all ( or at least a significant portion ).so you can just clear your query by getting you decisions clear in (www.bridgenile.com) [ where you get unbiased decision ][easy to invest in SHARE MARKET]

When the markets are going up and up, investors can be mesmerized by their returns. Everybody’s seduced by the possibility of growth, thinking it’s the probability of growth. That’s where they get into trouble. As a result, they pour the majority or all of their money into investments that fit into the risk/growth( SHARE MARKET) bucket – not just 70% but sometimes 80%, 90%, or 100%. Some even borrow money to make investments that they believe are going to go up and up forever, until they don’t. And because of poor asset allocation, with too much of their money riding on one horse, they lose it all or end up in debt.

You’ve just made the most important investment decision of your life. And once you know what your percentage is, you don’t want to alter it until you enter a new stage of life, or your circumstances change dramatically. You’ve got to stick with it and keep the portfolio in balance. Are you still concerned about making the right choice? just remember we are here for you ( www.bridgenile.com) where you will get the best financial unbiased decision of your investment journey!!

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