June 21, 2011

An insight into Share market - Part 1

I have always wanted to know about share market inside out since my college days. But the problem was that I was not ready to risk my father's money. Plus none of my friends had any clue about investing then. Very few elders who I thought would help me in this advised me to stay out of it because of the risk involved. So I dropped the idea of knowing.
Now that I have a decent income and considering the fact that Iam very bad in saving money I decided to start my mission once again. Fortunately in my company there are many people who are into investments because of which I managed to gain some knowledge.Thus my search for knowledge started again with the help of few people. And iam here to share that knowledge here. Feel easy to guide me if you are also an investor and if you are not do browse through the sites Iam about to share in this post.


Pre-Requisites

  • Have a De-mat account ready (online account is preferable)
  • Make sure from the bank if trading account is the same.
  • Once you get a mail from the bank stating that your account is ready for trading, its done


Simple logic:

Buy a company's share when its price go down and sell it when it has reached your desired upper limit. For eg: Today Yes Bank's one share costs Rs. 295. Assuming you are buying 5 shares of Yes Bank, you invest
Rs. 1495 in the bank. Remember though you are free to sell your shares anytime you want, it is highly recommended that you consider investments for long term benefits. So set a target for the shares you have bought. Like you can sell when each share of yes bank goes up by Rs.1000. Well for 5 shares you have bought you would get a gain of Rs.5000. But again this might take time depending on the bank's performance.

Talking about performance of a company, it has equal chance of going down too. That is the risk you should be ready to take. But dont worry there are ways you can minimize the risk and stay away from losses.
Iam a person who will never ever take risk when it comes to money but I love investing. So in this case I make sure that the money I invest is safe with no risk at the same time I make profit out of it. There are ample sites which will help you but the one site that almost every investor follow like a Bible is www.moneycontrol.com. Actually there is one more which can wait for now.

Goto the website and browse through a few company's quotes and also through the performance charts. And dont ignore the comments section where people who have bought or yet to buy that particular share have a discussion. So all these will give you an idea of how the share performs in the current market scenario and if you should buy the share now or wait for some more time for it to go down.

Keep watching this space for more information.
Signing off for now.
Happy Trading!
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