7 Great Secrets: How to Win the Stock Market Game?
Table of Contents
- Stock Market – Game or Gambling?
- Stock market resembles more like a game
- Why does these 7 remain as Secrets?
- Stock Market Tips on Managing your Portfolio During this CoronaVirus Crisis
- 7 Stock Market Secrets
- Bonus Secrets
- 25-Commonly asked questions on How to Win the Stock/Share market game?
- Conclusion
Stock Market Crashed due to coronavirus crisis!
What should you do to make the right stock market investment decisions now?
If you have already invested and looking for guidance, we have few tips on what to do now to recover your portfolio faster and better?
If you are a first timer investing in the stock market we have also covered the 7 stock market secrets elaborately, which will help you create and manage your wealth.
Humans have a natural tendency to follow the crowd, but when it comes to stock market investing, following the crowd can often result in losses. Why replicate the mediocrity of the masses when you can clone the success of the World’s Greatest Investor?
The 7 stock market secrets/investment secrets of warren buffet have got unveiled here. These share market secrets will help you uncover and understand “How to win in the stock market”
Stock Market – Game or Gambling?
A game has its own set of rules. If you follow the rules and play the game, you can win the game over a period of time. There is logic behind every move in the game. To win the game, the never give up mindset is important. Also, emotional maturity and discipline are required to become successful in the game. A player takes very calculated risks in a game. Continuous preparation and practice make a player successful in the long run.
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Gambling has lesser rules than a game. The winning in gambling is based on luck or chances. A gambler takes blind risk. Very less preparation and practice are done here. There are no sure-strategies for success in gambling.
There are people who gamble in the stock market. However, if we take the stock market as a game, it will help us become successful in the long run.
Stock market resembles more like a game
- Like a game, the stock market has its own rules. We will see 7 of the stock market rules in detail in this article.
- Following these rules will help you become successful in the stock market.
- Any decision, you take in stock market investment should have logic and rationality to get results.
- Staying the course even during financial storms with a never give up player mindset is important for stock market success.
- Emotional maturity, discipline, continuous preparation and practice are essential to winning the stock market game.
- You take a calculated risk in the share market and not a blind risk.
Why does these 7 remain as Secrets?
A fact or idea or strategy remains a secret because it is less known or not known to most of the people.
Ex: How does Google rank various web pages? This is kept as a secret by the people. Most of us don’t know about this.
The 7 secrets of investing in the stock market will not fall into this category.
There are another set of secrets. A fact or idea or strategy is available in open source but less practised or not practised by most of the people.
Ex: Values and life lessons explained in holy books. These are available to us in an open source, but are practised by a very few people.
The second set of secrets are not so easy to follow or implement but worth knowing.
The 7 secrets of investing in stock market may sound known already in some form. But will definitely give you a new perspective.
Stock Market Tips on Managing your Portfolio During this CoronaVirus Crisis
Before discussing the 7 stock market secrets, let’s find the answers to the questions you have during this Stock market crash. Due to the stock market crash, there is a 38% fall in the market, which is a huge fall. Now, do you think there are things you should do to recover faster and better from this stock market crash? Let’s check out.
1. Are you in a confusion as to what to do with SIP now?
There are three options in front of you. It is either to stop, continue, or increase your SIP. Do not stop them now assuming that it will make a further loss. The answer is to continue your SIP and for best results, increase your SIP. It is better to stay invested and do not discontinue your SIP. Read: How to play smart with your SIP.
2. Is Portfolio rebalance needed when there is a stock market crash?
Yes, portfolio rebalance is a must during this time. Head start portfolio recovery by rebalancing as it helps you recover faster. To know the steps to rebalance the portfolio. Read: How portfolio rebalance helps. (with this link find the steps to rebalance the portfolio).
3. How to recover faster from the stock market crash?
This can be done by a portfolio revamp. A portfolio revamp is done by moving your investments from poor-performing to better-performing investments. This is one of the ways to recover your portfolio faster and better from the stock market crash. We have experimented with the past data, and revamping has worked. Get rid of your endowment plans and your ULIPs too.
Is it ok to redeem and reinvest now? Read: How to revamp for faster and better results. (This link also includes a bonus benefit of doing portfolio optimization now and the tips to identify the poor-performing equity funds).
4. Is there any financial contingency plan during coronavirus?
Yes, have your health protection in stand by, list all your mediclaim policies, ensure family coverage. Make emergency preparations, i.e. if anyone in your family contracts COVID-19, know whom to reach. Have the emergency helpline ready. Prepare an information vault. This is how you can have a financial contingency plan. To know more Read: Coronavirus financial contingency plan. (With this link you will have a free download of the information vault).
5.Want to take advantage of this stock market crash?
Do not panic and jump out of investments, assuming to avoid further loss. If you’re having an unavoidable financial need, handle them wisely. You can use your debt investments, emergency funds and also use the EMI moratorium if you’re badly in need. To know more read: how to take unfair advantage of the coronavirus crash.
7 Stock Market Secrets
Secret No. 1: Focus on the Quality of Business and not just the Stocks
This is the first and foremost of the 7 Stock market secrets.
Warren Buffett said, “When I buy a stock, I think of it in terms of buying a whole company, just as if I were buying a store down the street.” Most investors don’t analyse the businesses they invest in. They simply follow the symbols or brands of successful corporate houses.
If you are buying a shop, you will analyse about
- the products dealt by the shop
- overall sales
- consistency of sales
- competition for the shop
- competition strength of the shop
- how the shop will manage the change in customer trends
We need to apply a similar logic before choosing a stock. Don’t think that you are only buying a few shares of that company.
Also, watch the video here!
Will you buy the whole company if you have enough money?
Getting a satisfying answer to the above question from yourself is the first stock market success secret.
Thinking on these lines will help you uncover the first secret of stock market trading and investment.
10 Financial Ratios that can reveal the quantity and quality of a business:
An in-depth analysis of the below ratios will help us become successful with the first secret of the stock market.
| 1. P/E RATIO | It is better if it is less than 25. |
|---|---|
| 2. PRICE-TO-BOOK VALUE | If it is less than or equals to 1.5, or lower as compared to peer companies in the same industry, then it is better |
| 3. DEBT-TO-EQUITY RATIO | Please check if this is less than 1. |
| 4. OPERATING PROFIT MARGIN | It depends on the sector.A higher ratio is the better. |
| 5. PRICE/EARNINGS GROWTH RATIO | It is better if it is greater than 10%. |
| 6. RETURN ON EQUITY | Greater than 20% is preferred in this case. |
| 7. INTEREST COVERAGE RATIO | At least 2, higher the better. |
| 8. CURRENT RATIO | Greater than 1 is preferable. |
| 9. ASSET TURNOVER RATIO | Higher the better |
| 10. DIVIDEND YIELD | Around 4-6% is preferable. |
These ratios help us
- Understand the real worth of a company.
- Get to know the financial soundness of a company.
- Compare a company with its peers.
Please do your homework with these ratios of the company in which you are planning to invest. This homework will help you pass the first share market secret.
Long term Track record:
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Studying the long term track record will help us choose the right company stock or a right mutual fund scheme which take strong long term decisions even if it affects the short term performance.
An investor should not miss these investments with long term visions. Companies or mutual fund schemes with a vision of long term performance are always better than those who focus on short term performance.
Activity:
The answers to the following questions will reveal how far you fair with reference to the first secret of share market investing:
- Do you clearly understand how this company makes a profit?
- Can you explain the above answer to a 12-year-old?
- Do you have unshakable trust in the future prospects of the company?
Bonus Tip:
If you think, identifying a good share then you can choose a good equity mutual fund. The mutual fund manager will identify good stocks which will pass the above tests.
Secret No. 2: Are you willing to own a stock for 10 years? If no, then don’t own it even for 10 minutes.
Once you find a quality business, you need to decide if you will own this stock for 10 years, which is the second secret in the 7 Stock market secrets.
Stock Market – Voting machine or Weighing machine?
Only buy something that you’d be perfectly happy to hold if the stock market shut down for 10 years. In the short run, the stock market is like a voting machine–tallying up which firms are popular and unpopular. But in the long run, the stock market is like a weighing machine–assessing the substance of a company.
Looking at the short term opportunities in the stock market will not be a long term successful strategy. If you don’t feel comfortable owning something for 10 years, then don’t own it even for 10 minutes.
This second secret of stock market success can be rephrased as “Stop thinking short term and start thinking long term”
Stock Market – A place to be inactive
If you think, by making frequent active moves you can beat the stock market game, then you are wrong. You have to buy right and sit tight.
“We continue to make more money when snoring than being active. Inactivity strikes us as intelligent behaviour.” – Warren Buffet
According to the research done by Dalbar, investors earn less return because of these frequent actions.
“Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.“ – Warren Buffet
You are not rewarded for taking action in the stock market. You are rewarded for being right in the stock market.
Insights on the second secret of stock market investing
Don’t get infatuated with a stock because of the temporary rumour or hype in market. Don’t invest in a stock to make quick money. You may end up making quick losses as well.
Be a part of the long-term success story of the company and not to capitalize on the current news making situation of the company.
Peter Lynch says, “Invest in companies, not in the stock market. Ignore short term fluctuations.”
Secret No. 3: Check thousands of stocks and look for very high bargains
Avoid investing based on the stock market tips or recommendation. Do your own research. Analyse thousands of stocks before choosing the right stock to invest. That is one of the secrets to win in the stock market.
Once you have chosen a right stock, wait till the share is available at a very high bargain price. Buying a right stock at the right price is the key to investment success. Investors have the luxury of waiting for the “fat pitch”.
Identifying the undervalued stocks:
“No matter how wonderful a business is, it is not worth an infinite price. We have to have a price that makes sense and gives a margin of safety” – Charlie Munger.
Finding a right stock is one thing, but figuring out whether they are undervalued or not is a different thing and a difficult thing. By analysing the fundamentals of the company like earnings, revenue and assets, we can arrive at the intrinsic value of the company. If the intrinsic value is more than the current price, then the stock is definitely undervalued. It is worth investing in that company.
It is really difficult for an individual investor to analyse thousands of stocks and finding out the right time to buy a stock in the stock/share market. If this is the case, you can outsource this Portfolio Management Scheme to a professional financial planner or wealth manager. But you need to be careful in choosing a professional financial planner who is capable and at the same time customer centric.
The third secret of stock market success can be achieved if you have time and patience or by outsourcing it to the right expert.
Insights to implement the third secret of investing in the stock market:
In order to master the third secret of investing in stock market, you need to do these two simple things:
- Identify a good stock after doing a thorough and in-depth analysis of 1000 companies.
- Buy that good stock at a very good bargain
If it is not possible to identify the bargain, then you can follow a simple yet powerful strategy called Systematic Investment Plan. This will make the investing process much easier.
Secret No. 4: Scrutinize how well a management is using its resources.
Check how efficiently a management is using its resources like money, manpower and material. This management efficiency will in turn reflect in Return on Equity and Return on Capital.
This is a very simple and profound secret for stock market success.
A company will have resources of different types like
- human resources
- financial resources
- physical resources and
- Knowledge resources.
All these resources need to be used efficiently. Only when all the resources are used optimally, a company can continue to deliver consistent profits. For sustainability of the business, efficient resource management is important.
Any wastage or underutilization of resources by a company need to be taken as a warning signal when investing in the stocks.
This efficient management of different resources is the fourth and profound secrets of stock market success.
Secret No. 5: Always stay away from “THE HOT STOCKS”
Hot stocks are those stocks which have some attention catching activity such as severe volatility in share prices, high trading volume or when the stock market is in news. Stay away from these hot stocks.
Warren Buffett once said, “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
It is not advisable to chase the hot stocks or hot mutual fund schemes. All stocks and funds go through a performance phase and non-performance phase. A performance phase will be followed by a non-performance phase.
Instead of chasing a stock or fund which is hot (performing now), we can choose stocks or funds which has performed well over a period of time, and which has the potential to perform in the long run.
Hot Stocks Vs Boring Stocks
Hot stocks can easily burst. Hot stocks become hot because of the sensation created by news media. This sensation increases expectation. The increased expectation will work against you.
Stocks which are not in the limelight, and stocks which are boring will eventually deliver remarkable results.
Boring Stocks and Plants:
Boring stocks are like plants.
- The growth is very slow.
- Less interesting to watch them grow.
- Watching the growth has less curiosity.
- But the end result is rewarding.
- Needs a lot of patience to wait and see the growth.
- No smart moves can bring quick results
Identifying the unnoticed and undervalued stocks is really an important secret to the stock market success. Not falling prey to popularity is an important stock market tip/secret.
Secret No. 6: How much money will you make?
Before investing in stocks or the stock market, calculate ‘how much money you will make’ in that investment. Of course, you need to make a few assumptions to do this calculation. But do calculate.
Most often investors tend to ask the share is undervalued or overvalued. Identifying the intrinsic value of a stock is difficult, and the various models available to calculate the intrinsic value are faulty.
Warren Buffett wrote in a report “Unless we see a very high probability of at least 10% pre-tax returns, we will sit on the sidelines.”
How To Estimate The Return From a Stock?
We need to take into account the expected dividend and the expected share price appreciation.
Share price appreciation can be estimated by taking into account the change in Earnings per share and change in P/E ratio.
Return on Equity = Net Income/Shareholder’s Equity
Look before you leap. Calculate the ROI before you invest. This is a simple but sound stock market secret.
Secret No. 7: Get rid of the weeds and water the flowers — not the other way around
This is a very good stock market strategy when you review your share portfolio or mutual fund portfolio.
People have this theory of loss-aversion, i.e. when the share price falls down by 50%, they choose to wait. They convince themselves and others by saying “It will definitely come back”.
Also, people will rush to book profit when their shares go up just by 10%. In effect, investors tend to keep the loss making shares with themselves and they offload their profitable shares. Actually it needs to be the other way around.
This stock market secret of “keeping the winning stocks and getting away with the losing stocks” will pay a vital role in you becoming the successful stock market investor.
Instead of getting attached to the stocks or funds selected, we need to be attached to the logic behind the stock selection. If a stock or fund is not maintaining the good fundamentals which was there when you selected it, then you can consider them to sell.
Emotional Barrier To Master This Secret Of Investing In The Stock Market
- Non-acceptance: Not able to accept the fact that we have made a wrong investment decision and the inability to accept the loss make us retain and continue the loss-making investments.
- Pride and Impatience: To showcase our pride of achieving, we may tend to sell the profit making shares. If we could patiently wait longer, we can make huge profits.
Though this is the last secret of the stock market success, this secret is the most important and not to be neglected secret for the stock market success.
Bonus Secrets
As investors practice stock investing with the above secrets, they come back to us with a few more challenges. We are discussing those challenges here with the secrets to face those challenges in stock investing.
Bonus 1: Top-Down Approach to Fundamental Analysis of Stocks:
The fundamental analysis determines the intrinsic value of a company. Investors accomplish this by examining influential forces such as
- financial growth,
- profitability, and
- future financial trends
at the national economic level, the industry sector level, and the individual company level.
By examining these forces, fundamental analysis allows investors to forecast these forces and then use their forecast to help determine the likely price paths of the analyzed companies’ stocks. By determining which companies’ stock prices are most likely to rise and which are most likely to fall, investors are able to make investments where the chances of profitability are greatest.
The fundamental analysis typically proceeds in a top-down manner, as follows:
- Analyze the overall economy, including current economic indicators and trends and broad-based economic forecasts to determine whether the economy is likely to be growing, declining, or stagnant over the ensuing 12 to 18 months.
- Assess major industry groups, performing a similar analysis to that employed on the general economy to determine which industry groups are likely to prosper in coming months and which are likely to sag.
- Evaluate specific companies. Company analysis involves an assessment of a company’s fundamental strength, which includes such factors as its current, past, and projected financials; the credibility and skill of its management team; the vibrancy of its markets; and the quality and market leadership of its products.
- Fundamental analysis is beneficial for long-term investors. Over the long-term, when the fluctuations of daily or weekly price swings are smoothed out, the most fundamentally sound companies are the ones that are most likely to produce and sustain rising price levels.
- Fundamental analysis, when engaged in over an extended period of time, makes it easier for you to intuitively understand how specific sectors and stocks are likely to perform under given national economic circumstances and to be able to more quickly identify the most promising investment.
The above process creates a shrinking funnel, in which only the most promising companies “fall out” as investment candidates in the end.
Major benefits of fundamental analysis include:
Bonus 2: How to avoid Hazing in the stock market
First, let me explain ‘What is hazing in the stock market?”. Hazing is cognitive dissonance. It is the concept of people being torn between two opposite ideas or strategies or values.
Most of the times, before arriving at an investment decision, there will be conflicts in our mind. For example, a thought will argue ‘Markets are crashing. Your portfolio value is eroding. So, book profits ASAP.’ And another thought will counter argue ‘Markets are crashing. Stocks are available at discounted price. So, this is a good time to buy’.
When you hold both the thoughts continuously in your mind without coming to a logical conclusion, then that stage of confused thoughts is considered as hazing.
When you do hazing in the stock market, you will be emotionally imbalanced. This will make you take irrational decisions for which you will regret later.
As we have discussed in detail on what is hazing in the stock market, let us discuss on how to avoid hazing in the stock market.
- Write down the conflicting views
- Read the books of successful legendary investors
- Create a financial plan with the help of a professional financial planner
- Filter the financial news
When you keep things in your mind. You may not get clarity. Put it on a paper. Divide a sheet into two columns. Write down the supporting points for each argument in each column. Search for additional points. Quantify the expected results of taking or not taking each decision. This will give you more clarity in taking decisions.
Read the books of successful legendary investors like Warren Buffett, Peter Lynch, Ben Carlson and Howard Marks. When you read these, the guiding investment principles followed by them will be internalised by you. So you will be strong in your mind with reference to these investment principles. Market noise will not disturb your mind.
A financial plan is created with logical steps and checklist. There is no room for emotional decisions in the financial plan. A financial plan is like a compass; it will give you direction when you are off-track or confused.
Whenever you get a financial news, you just try to answer this question: “Am I going to worry about this news even after 1 year or 3 years or 5 years or 10 years?” Most of the breaking news today will be irrelevant over a period of time. The illusion they create today is temporary and not real.
I will suggest you an exercise. Read some of the old headlines and check how it impacted the investments. How do those headlines affect your long term goals?
Example:
What kind of hyped headlines did we get during demonetization? How is it affecting the economy? What was the index when demonetization was announced? What was the index level after 1 year?
When Trump won the election in US recently, what kind of market predictions ruled the media? What happened eventually?
You’ll find out that the majority of the headlines will have no impact or a very less impact on your long term financial goals.
Bonus 3: How to book profit in the stock market
- Ignore Booking Profit
- Book Profit when you near your goal
- Book Profit based on Asset allocation:
When Warren Buffett chooses to invest in a company…
He is not concerned whether the stock market will eventually recognise the worth of the company.
But, he is concerned how well this company will make money from business in the long run?
As long as you have long term time horizon and right stocks or funds, you need not worry about booking profit.
When you are about to meet your financial goal, you may have to book profits. When your long term goal becomes a short term goal over a period of time, then you may have to reduce equity exposure towards that financial goal so as to avoid the market fluctuations.
Example:
You are starting now to invest in equities for buying a property after 10 years. As 10 years is a long term time horizon, you can invest in equities. Down the line after 7 years, you will just have 3 years to buy the property. 3 years is a short term time horizon. It is not advisable to invest in equities for short term. So whatever the equities you have accumulated over the 7 years, needs to be withdrawn and reinvested in debt.
When you have predetermined asset allocation, in order to rebalance to bring back the asset allocation to its original ratio, we may need to book profits.
Example:
You have Rs. 10 lacs to invest. Based on the recommendation from your financial plan, you want to follow an asset allocation ratio of 70:30 (equity: debt). So you invest 7 lacs in equity and 3 lacs in debt. End of 1 year your equity portfolio value stands at 8.75 lacs and debt portfolio value stands at 3.25 lacs. Now if you look at the asset allocation ratio, based on the current value, it will not be 70:30. Now to rebalance it to 70:30, we may need to book profit from equities.
25-Commonly asked questions on How to Win the Stock/Share market game?
1. How to invest in stocks with little money in India?
You can invest in stocks with little money, many stocks are available at a cheaper rate of less than Rs. 500. Your small investment may fetch you small benefit or you may lose your money, with equal probability.
As you can conclude after reading this article that for winning the stock market game, you must invest for the long term, after doing a detailed analysis of stocks according to the 10-financial ratios, as described in 1st secret of stock investing.
2. What is the minimum required amount to invest in the stock market in India?
It starts with a very low value. Most of the investors start with a minimum amount of Rs. 500! You can invest in the stock market through mutual funds also. Even there the minimum investment is only Rs.500.
But as described in the previous question, it is suggested to follow a long term stock investment strategy. Prepare yourself with all the required information, before getting into the stock investment game.
Information given in this article is all you need to win the stock market game. You can further read this article to understand the details of Short term and Long Term investments.
3. Where to buy stocks?
You can buy the stocks through Stockbrokers.
4. Where can I get the company’s financial report and other information?
Such reports are available with the Stock exchange website which is updated periodically.
5. How much time to spend per day, researching on stocks?
Initially, you need to have a detailed analysis of the stocks as portrayed in the 7 secrets above.
After the investment, you need not spend long hours researching about stock performance, though it is required to be checked on a daily basis.
Also, you can take help from your financial advisor to significantly save your time and efforts.
6. My stock price is already down by 55%, how much further down it may go?
Variation in stock price is an unpredictable phenomenon experienced by every investor in the stock market. It may go down to ZERO or it may go UP.
Your responsibility is to keep reviewing the Financial Ratios periodically, whether they still hold a good reputation for those stocks.
If all financial ratios are fine, then you should continue your investment.
Otherwise, you may consider shifting your investment to other stocks, as your existing stock is not profitable for you.
7. How many stocks are there per company?
It depends on the size of the company. Typical startup company consists of 10,000,000 authorized shares of Common Stock, but as the company grows, it may increase the total number of shares as it issues shares to investors and employees.
8. What are the short term investment plans in India, with high returns?
Stock market is not a place for short term investment. If you are investing for long term, then do the fundamental analysis and the 10 points checklist of the stocks as described in the 1st secret.
If you are really in need of short term investment, then avoid stock market. Basically, the accrual-based debt funds are better among the short term investment plans with better returns.
But, it is advisable to check with a financial planner who can give you a customized recommendation that best suits your specific requirement.
9. Are small caps more profitable than large caps?
Small caps are more profitable but they are riskier as well. Also, the quality of stocks plays an important role.
10. How long should I invest in my profit-generating stock?
As long as you can. Warren Buffett says, “Our best investment period is forever”.
11. What is the right time to Invest in Stocks?
It is suggested to invest in stocks when the market is LOW! Such times are similar to the time of sales happening in online stores such as Amazon or eBay, where you can purchase the goods at lower rates. In a similar way, stocks are available at reduced rates at low market conditions as compared to high market condition.
But, market conditions are highly unpredictable and you cannot predict the time when the market will be low!
In such cases, if you find a quality stock based on the financial ratio analysis and you find it highly expensive as compared to its cost variation in previous months, then you may wait for the cost to come down a bit.
But, being a long term investor you should invest on a regular basis during good and bad times. In the long-term, you will average out the ups and downs of the market.
Read these articles for more details on “Right Time to invest” and “Timing the Market”.
12. What happens when a company goes bankrupt?
Company is required to liquidate all its assets and pay back the creditors, who settle all the debts levied on the company, if any capital is left after paying off all debts, then the balance money is distributed among the stockholders.
13. What kind of stocks should I avoid?
Stocks with low liquidity are to be avoided. There are a number of small-cap stocks where the prices may be falling on a regular basis, and the investors are not able to sell those stocks just because there are no buyers!!
14. How many stocks should I buy?
Ideally, the stocks must not be more than 15-20. If you choose to invest in stocks through mutual funds, then you can have 3-4 equity funds in your portfolio.
15. Is there a possibility to become rich while investing in stocks?
Yes, it is possible to become rich by investing in stocks. But your stock investment strategy must be long term and consistent.
Also, it requires a dedicated hard work of researching the companies. Dedicatedly follow the steps laid down in this article and you will win the stock market game.
16. What is the right amount of money to invest in stocks?
Though you can start investing in the Stock Market with a sum of less than Rs. 500.
But, to win the game of stock market you need to have a long term strategy of investment.
You need to decide the right amount based on your risk taking ability and the amount of long term money you have.
17. Can you get international stocks?
Yes, it is possible to invest in international stocks. There are many mutual funds and ETFs who invests in international markets. You can invest in these mutual funds/ETFs to indirectly invest in the foreign equities and it is the easiest way to invest in international stocks.
Below are the popular mutual funds who trade in the international market:
- ICICI Pru US Bluechip Equity
- Kotak US Equity Fund
- Reliance US Equity Opp. Fund
- Motilal Oswal NASDAQ 100 ETF
18. How frequently one should invest?
Regular monthly investment is suggested as compared to the annual lump-sum investment because you will get all the benefits of Rupee Cost Averaging, common ones are:
- reduced risk of timing the market in an ill-informed manner
- reduced average cost by exploiting the market fall,
- affordable monthly installments
- relieved of decision making in terms of market entry and exit.
19. What is the difference between BSE and NSE?
There are 3 key differences between BSE and NSE:
- BSE (Bombay Stock Exchange) ranks at 10th and NSE(National Stock Exchange) ranks in 11th position in global Stock Exchanges.
- BSE is the oldest and became a recognized stock exchange in 1957 whereas the NSE was recognized in 1993.
- NSE’s index, Nifty 50, gives top 50 stock index, and BSE’s index, SENSEX, gives top 30 stock index.
20. How to identify the best or the “winning stocks” in the Indian Stock Market?
After doing fundamental analysis and testing the stocks with 10 ratios described in the 1st secret in this article will give you the guideline to identify the “winning stocks”.
21. How to invest in share market and earn a profit? Share market earning tips!
As mentioned in the article that the Stock Market is a game, where you can win or lose, with equal probability. However, if you have patience and dedicated research skill to analyze the company in detail, you can earn a significant profit by following the 7-secret principles described in this article.
22. What are the Indian Stock/Share market’s initial tips and tricks for investment?
As a first step, Open your Demat and Trading account and commit to investing for the long term.
Then do the 10 Financial Ratio analysis and follow the stock market secrets as laid out in this post, it gives you all the information you need to win the stock market game.
But, if you are looking for quick tips or shortcuts to get rich quick overnight by investing in stocks, then share market investment is not for you. If you are looking for a rock solid hottest investment tip, it is discussed here.
23. What are the Indian Stock market success stories?
One of the biggest success stories is the 25-year completion of Franklin India bluechip fund. All those who invested Rs. 1 Lacs since the inception of this fund in 1993, that is, 25 years back. The value of that 1 Lac would be around Rs. 1.03 crores, despite all the big hiccups and economic slowdowns all these years.
Also, the returns experienced by the Sensex and Nifty are as high as 78.07% and 82.45% respectively, in the last 10 years!! The Indian equity market is outpacing some of the bigwigs in the developed world such as the US, Germany and Hong Kong.
24. How to win big in stocks market?
To win-big in the stock market, you need to be an Intelligent Investor with all important knowledge about stock investment. Plus, you need to have a focused long term strategy of Investment. You can read and understand the further analysis of Short Term and Long Term Investment, and make your practical long term investment strategy.
25. Who is the best stock advisor in India?
There are really good stock advisors. Are they suitable for you? Can you invest based on their recommendations.
Stock Advisors will give you a Readymade list of stocks who are top performers in the current market. But they cannot help you with the personalized list which is customized with your needs.
Therefore, it is advisable to take advice from Financial Planners. They will help create a Financial Plan for you and your family. And, also they will help you choose the right stocks, that meet your financial needs.
For more details, you can read the Role of financial planners. Here you can also learn how to find the best Financial Advisor for you.
Conclusion
These 7 (+ 3 bonus) stock market secrets if applied properly in the Indian stock/share market, they would be your roadmap to riches.
In order to strengthen your roadmap to riches, you need a clear route map in the form of a financial plan.
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