Tuesday, May 19, 2009
Prices that go up can come down
The first and most important rule is that the price of shares can go down as well as up. Because a share may have been performing very well for many years is no proof that it will continue to do so. All sorts of unforeseen and unexpected events can bring about sharp reversals in a company’s fortunes.
You shouldn’t invest any more money than you can afford to lose.
Understand your attitude to risk
To get bigger rewards you have to take bigger risks. This attitude can make you huge returns but can also lose you all your money. If you fancy a gamble, take this route. However, most people want to minimise their exposure to risks in the stock market. To achieve this don’t put all your eggs in one basket. A variety of investments across a range of different companies in different sectors of the market is more likely to insulate you from the ups and downs in individual shares.
There are many and varied ways of spreading your risk. You could choose to invest in companies in different sectors of the market, such as banking, retail and technology, or you could spread your risk by picking some large companies and a selection of smaller companies.
Bigger can be safer
Large companies, with strong finances and a long history, are far less risky than small, recently formed companies whose strength hasn't really been tested in the market place.
Big, safe companies are known as 'blue chips'. (In gambling, blue chips traditionally have the highest value.) Such companies are very unlikely to go bust. But even these are not completely immune. The demise of Marks & Spencer's share price is testament to that. There's no room for complacency in investment.
The flipside of ‘safety shares’ is that they are unlikely to grow fast, so you could expect a steady, unspectacular return from this kind of stock.
Be in it for the long term
To insulate yourself from falls or even stock market crashes, experts believe you should plan to keep your investments for a minimum of five years. That way, you’re more likely to ride out any downturn. If you think you could need your money before five years, you should steer clear of investing in the stock market at all.
Don’t panic and sell at a loss
The worst thing you can do should you suffer a downturn in one or all your shares, is to sell. This simply crystallises your losses. Keep a cool head and see what happens to the price of the shares over the next few months or even years. If losses occur across all your shares and were linked to a general stock market downturn, chances are that the market as a whole will recover in time. If your losses are connected to a particular share, you need to make a judgement call as to whether the company’s fortunes will change. If you think the situation will remain poor, it may be best to cut and run with whatever funds you have left.
It’s much easier to buy than to sell
Selling is the only way to cement any gains. A ‘paper profit’ is just that – worthless. Many people find it hard to sell their shares, particularly if they have made a profit.
There is no room for sentimentality in investment. It can often pay to accept that you will never sell your shares at the very top of the market. Waiting for the top can expose you to seeing your valuable shares slide in price.
Labels: sensex, share Market, share market tips, stock market, stocks
How to Buy Shares Online: A Guide to Buying Shares on The Stock Market
0 comments Posted by Steve Benn at 3:34 AM
Labels: sensex, share Market, stock market
Sensex closed at 14302, up 17 points (provisional) and Nifty at 4318, down 4 points (provisional)
0 comments Posted by Steve Benn at 3:26 AMThe market ended flat today amid high volatility and saw the highest turnover ever of Rs 1.57 lakh crore. Sensex closed at 14302, up 17 points (provisional) and Nifty at 4318, down 4 points (provisional) from the previous close. CNX Midcap index was up 2.21% and BSE Smallcap index was up 2.59%. There was heavy buying in realty (BSE Realty index up 12.8%) and selling in IT stocks (BSE IT index down 10%). The market breadth was positive with advances at 924 against declines of 332 on the NSE
Labels: sensex, share Market, stock market
Monday, May 18, 2009
Welcoming UPA's win in the solon elections markets unsealed on a real upbeat say triggering of journeying breakers for the primary period ever. The shares surged nearly 15 percent within seconds of alternative on Monday, triggering circuit breakers that halted occupation for two hours as investors glorious a comprehensive election victory for the judgement union. The markets further stretched their gains which triggered the unalterable journeying breaker that shuts patronage for the day. It was the honours minute a journey wave has been set off by a origin in the Bombay Repute Change (BSE), a spokesman said. The measure 30-share BSE indicant wine 14.70 proportion to 13,963.30 points, its highest since September 23, and the 50-share General Reputation Mercantilism (NSE) finger jumped 14.48 pct to 4,203.30, also an eight-month squeaky. Earlier, the BSE said its forefinger had risen 10.7 proportion before the halt. "It is real startling because the turnover was not some. It's rattling calculating to interpret how the racetrack breakers get been triggered when the volumes are so low," T.S. Harihar, evil chairman at ICICI Securities, said. Raceway breakers are set supported on moves of 10 proportionality, 15 percent and 20 pct using the chummy to the previous kill as a drug. Triggering a raceway ledgeman in one market also closes the different. The BSE forefinger was up 1,789.88 points and the NSE indicant was up 531.65 points at the preclude, both having decussate the 15 pct causing limits. When trade resumed, the BSE forefinger wide its ascend by 160.12 points to 1,950 points and the NSE vino another 68.35 points to be up 600 points on the day, the 20 proportion decrease was triggered and line was halted for the day.
Labels: sensex, share Market, stock market, trade news
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