The First Step To Share

Stocks-Mutual-Funds Share market is always analysed in two extremes, either it goes up or it goes down. If the share market experiences an upswing for few days it would result in a sudden spurt in buying of stocks and continuous fall in the value of share prices for some days would lead to selling, investors would refrain from investments. There is a reasonable degree of interest among Indians in the share market, because we see a certain degree of financial security in the securities. India does not have social security schemes and reliable medical insurance cover, due to which our post retirement savings schemes are higher .pared to other countries. Indias saving rate is as high as 25-27% of the GDP, one of the highest in the world. Another important issue with which we have been reeling for some time is the gap between inflation and interest earned. The interest that we earn on our saving should always be higher than the inflation rate, otherwise our saving wouldnt multiply. But unfortunately off late it has been observed that interest earned from banks and various government schemes have dropped substantially. In such a scenario investment in stock market seems more profitable. Stocks have consistently provided higher returns than fixed in.e savings avenues. They provide the power to beat inflation. However, we hear stories all the time about people losing in the stock markets. Where are the gains? Perhaps, one has to question our attitude towards share investments. Do we perceive shares as investments? Or a form of lottery with a jackpot round the corner? Any investment proposal needs to be evaluated against the returns it will provide over a specific time frame. However, when shares are bought, investors do not target specific levels of returns nor do they consider the risks. The share market is not the place to look for a windfall. However, over the long term, share markets have normally provided returns averaging around 15% to 20%. Anything more than this should be considered abnormal. There are times when share prices climb even higher but the ones who really benefit are those who cash in on their gains. Dont belittle the 15%- 20% annual gain that shares have been giving. Over time and with .pounding it makes a huge difference. Money can be made on the share markets only if targets are set and a stop loss limit. For example: if an investor wishes to earn a return of 30% annually, the portfolio may be rotated thrice a year, with a 10% target profit each time the investor enters and exits the market. In the same way, if there is a 10% loss, one must exit the share. With such targets, it is difficult to make sizeable losses. One could try this theory out on a mock portfolio. Even if the profits are not targeted, the stop loss must be set, even if the purchases are for delivery. The availability of a Demat facility makes entry and exit extremely easy. About the Author: 相关的主题文章: