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Sunday, 6 November 2011

Smart Investment in Stock Market

 

Stocks are said to be one of the best methods of investments. Many investors who have shown their keen interest in stocks and shares are raised very sharply. 

Why should you invest in stock market 

  • It gives high rates of returns compared to the other forms of investment                     

  • There is an opportunity to diversify your portfolio to reduce risks involved 

  • You can save your taxes because when you hold the stocks more than one year, the profits are taxed only 15%. 

 Investing in the stock market can be a difficult process, but as long as you know the basics of share market. 

7 Important tips for young investors:  

  • To retire rich, start saving now:If you begin investing at age 25 , you need to keep goals and need to plan according to your goal to achieve it by age 65. 

  • Get the Debt saddle off your back:Try to be free from all credit card bills and high interest loans to eliminate the high interest charges that you incur.

  • Don't confuse investing with saving: Saving is different from investing. many people saving for house ,a car, higher education etc. By all means continue saving but don't invest your savings in stocks and stock mutual funds.Investing will work wonders for you but the time period of less than five years may not give enough time to recover from substantial market drop.

  • Take advantage of your employee retirement plan:Retirement plans offer a great opportunity to accumulate enormous sums of money. The money you contribute from your pay check is tax deductible and will grow without being taxed. A retirement plan is still a great wealth building tool.

  • Start investing with less amount of money:Mutual funds allow you to invest with less amount of money. Many funds will waive their regular minimum if you commit to an automatic investment plan where money is taken out of your bank account and put.

  • Don't try to micro-manage your investment :Journalism tends to have a negative bias and very short term horizon. Don't make sense of the markets short term trends. Stay focused on your investment goals and not every news paper head lines 

  • Mutual funds are the best for the core of your  portfolio:Mutual Funds are terrific for the young investors because they allow investors to own many company stocks.

  • There are two types of investment

    1. Direct investment in stock market

    2. Indirect investment like mutual funds and portfolio investment services

     After having research and thoroughly investigation you will come the level where you can create the right type of Investment plan and investment choices. Then all your worries of loosing money in the stock market will disappear. There is no difference whether your portfolio is rising or falling.

    Income producing investment plan based on these fundamental investment strategies.

    • You need to time the market well or you have to invest for long term to get good returns on your investments.

    • You need to be carefully select stock for investment. You need to know the valuations at which to buy a stock or sell a stock.

    • You should be aware of news and have research to pick a winner.

    • Make smart investments in the stock market by using stock market crash to your advantage.

    • Investing in only those companies that have a historical record of raising their dividend every year. 

    •  Having the dividends from those companies rolled back into more shares each quarter.

    Risk factors, long term goals and timely investment features are to be analyzed. Limit your adverse stock losses as much as possible.



2 comments:

వెంకట్. బి said...

చాల బాగుంది అనిల మీ ఆర్టికల్. ఎంకరేజింగ్ గా ఉంది @ 25 సవస్తరాల నుండే investment అనేది చాల గ్రేట్ సలహా. కానీ తల్లితండ్రులు , ప్రస్తుత సమాజం stock investment అంటె జూదంల చూస్తున్నారు

worldknowledge said...

Thank you very much venkat.

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