How Can We Get Profit In Share Market – Investing in the stock market can be difficult, especially for people who are new to the world of investing. The investment process has become hassle-free these days as individuals can invest their funds in stocks through various digital platforms.
In case you are not up to date with the process, here is a complete guide on how to invest in the stock market online.
How Can We Get Profit In Share Market
Here are the steps you need to follow to buy stocks from the comfort of your home:
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For people who want to learn how to invest money in the stock market, it is important to keep certain factors in mind.
If you are wondering how to start investing in the stock market in India or any other investment opportunity, you must first determine your financial goals. The investment objective is not universal and changes for each investor.
Therefore, you need to choose stocks keeping in mind your financial goals. Also, determine your investment horizon before investing.
Another important factor to consider when investing in stocks is your risk tolerance. Investors with a low risk appetite may consider investing in defensive stocks that offer stable returns and are less affected by market volatility.
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By building a diversified portfolio, you can mitigate risks. In other words, the more diversified your investment is across different sectors, the lower the financial risk associated with your investments.
Now that you know how to invest in the stock market in India online, open a DEMAT account with a broker of your choice and follow the steps outlined above to start investing. Also, keep in mind the various essential factors when choosing which stocks to add to your portfolio for better results.
The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investments in the securities market are subject to market risks. Therefore, read all related documents carefully before investing. Please read the risk disclosure documents carefully before investing in stocks, derivatives, mutual funds and/or other exchange-traded instruments. Because investments are subject to market risk and price fluctuation risk, there is no assurance or guarantee that the investment objectives will be achieved. NBT does not guarantee guaranteed returns on investments. The past performance of securities/instruments is not an indication of their future performance.
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Share Market Dashboard With Market Capitalization And Net Profit
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What Does ‘booked P/l’ Mean In The Stock Market?
When booking profits, also known as profit taking, individuals or companies liquidate their holdings in order to have the stock market profits they have earned paid out. It must be understood that there must be some profit associated with for-profit books. When stocks are liquidated and cashed out to avoid losses, such a situation cannot be called profit booking. So, an investor should not confuse between profit booking in the stock market and stop loss.
When the value of stocks increases, the resulting wealth is nominal. Because the share price is just an idea that can change at any time. And that’s why the value is not stable and constantly fluctuates. Therefore, any profit or loss calculation made using this value is purely fictitious. On the other hand, investors have cash when they liquidate their investments. The value of hard money does not fluctuate. Therefore, the wealth created is real. In other words: the transfer of nominal assets to real assets is nothing other than profit recognition.
As investors book profits, money flows out of the market and investors liquidate their shares for cash. So there is an inflow of receivables and an outflow of money. This situation causes stock prices to fall. When many investors give in to profit-taking, the market crashes. However, the resulting market declines due to profit booking are only of a very temporary nature. These issues are resolved and the stock price returns to normal within a few days as there is no problem with the fundamentals of the stock. Profit booking is merely a temporary instability caused by market sentiment.
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There are three main situations in which investors must not delay booking profits. These are as follows:
When there is positive news about the company, it creates positive sentiment in the market towards the company.
For example, FMCG major Hindustan Unilever’s share price rose nearly 7% intraday on Tuesday, March 24.
After signing an agreement with Glenmark Pharmaceuticals, HUL became the biggest Sensex gainer, acquiring its hygiene brand ‘VWash’.
Common Situation About Stock Market People. Want Profit But Loss Royalty Free Svg, Cliparts, Vectors, And Stock Illustration. Image 43121547
This led to excessive stock purchases by investors, which eventually led to an increase in demand prices. Investors could achieve their investment objectives by selling shares when stock prices are higher.
Just as there can be positive news for an individual company, there can also be positive news for an entire industry. The first reaction will be a price increase, followed by a peak. Then there is a sell-off, which leads to a temporary dip.
For example, the announcement of tariff hike by all Indian telecom companies – Airtel, Reliance Jio, Vodafone Idea. When this tariff increase was announced by telecom subscribers, a large rally was organized. The market had immediately taken into account the increase in profitability and its positive impact on the market valuation of these telecommunications companies was noticeable. The rally increased by almost 20-25% due to investors’ positive sentiment towards the telecom sector. However, due to uncertainty about the sustainability of the rally, many investors took profits during such strong rallies.
For example, BSE Sensex rose by around 41,000 to 42,000 and hit new highs when the GDP numbers for the December 2019 quarter were released. The gross domestic product or GDP growth rate had declined to 4.7% in the third quarter of fiscal 2019-20. According to economic data, the country’s economy was not doing well and the overall outlook was negative. Nevertheless, the market (Sensex) rose to over 41,000. The GDP data forced investors to sell their stocks at prevailing price levels in the market. Investors sold the shares at these prices, locking in their profits and protecting themselves from financial losses.
How To Earn Money In Share Market Daily
Suppose a portfolio of Rs 1 lakh investors consists of two asset classes – equity and debt. The same amount is invested in equity and debt, 50-50% in each asset class. If the equity share is upgraded from Rs 50,000 to Rs 75,000, the portfolio worth Rs 1.25 lakh will have 60% equity share. This appreciation from the previous 50% to 60% represents an “overweight” of equity capital. The investor should book part of the gains in equity and convert the money into debt securities to achieve the original asset allocation with a weighting of 50% to 50% , by converting fictitious profits from stock investments into real profits by cashing out the profits and switching to debt investments in fixed deposits, debt funds or liquid assets, as desired. This is the principle of rebalancing, where the goal of profit recognition is to ensure that the shares invested in each category remain constant as originally decided. Once a year, this portfolio rebalancing strategy proves to be the best in the long run as it requires no human intervention. Your portfolio is determined by a disciplined, constant weight asset allocation approach.
An investor decides to pay out the profits if the desired returns are achieved within the planned time horizon. For example, an investor seeks a 20% return by investing in a stock for a year. He will book the profits once his target return of 20% is reached
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