Most people shy away from investing because they are afraid of losing their hard earned money. No doubt, losing your hard earned money is a frightening prospect. But try to recollect, you were equally frightened when you went to school for the first time or when you were learning to drive. Investing in stock markets…
You probably know the concept that all your transactions in the stock market are done though a “stockbroker”. A stockbroker earns a commission on whatever transactions you make. Suppose you make a transaction of Rs.2000, and the stockbroker charges you a 3% commission, then you have to pay the stockbroker Rs.60 (3% of Rs.2000) for…
Inflation, is an economic concept. What the cause of inflation is, is not important to us from the point of view of this article. What is important to us is the effect of inflation! The effect of inflation is the prices of everything going up over the years. A movie ticket was for a few…
If there is one number that people look at than more any other number, it is the “Price to Earning Ratio (P/E)â€. The P/E is a ratio that investors throw around with confidence as if it told the complete story. Of course, it doesn’t tell the whole story (if it did, we wouldn’t need all…
The market is usually more concerned about the future than the present, it is always looking for some way to figure out what is going to happen in the companies future. A ratio that will help you look at future earnings growth is called the PEG ratio. You calculate the PEG by taking the P/E…
Even comparing the earnings of one company to another really doesn’t make any sense, if you think about it. Earnings will tell you nothing about how many shares the company has. Because you do not know how many shares a company has, you do not know how many parts that companies earnings have to be…
Fundamental Analysis Definition:Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices. The fundamental information that is analyzed can include a company’s financial reports, and non-financial information such as estimates of the growth of demand for products sold by the company, industry comparisons, and economy-wide…
Having understood all the basics of the stock market and the risk involved, now we will go into stock picking and how to pick the right stock. Before picking the right stock you need to do some analysis. There are two major types of analysis: 1. Fundamental Analysis 2. Technical Analysis Fundamental analysis is the…
You need to KNOW some “unforgettable basics†before you enter the world of investing in stocks. The stock market is a field dominated by savvy investors who know the ins-and-outs of the market. For people who are not “on the insideâ€, the stock market can be a VERY dangerous place. : Don’t even consider “tips”…
The Sensex is an “index”. What is an index? An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. The Sensex is an indicator of all the major companies of the BSE. The Nifty is an…
Stock prices change every day because of market forces. By this we mean that stock prices change because of “supply and demandâ€. If more people want to buy a stock (demand) than sell it (supply), then the price moves up! Conversely, if more people wanted to sell a stock than buy it, there would be…
Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to “raise money”. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing…