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How to invest in Stock Market from Today

How to Invest in Stock Market from Today
HOW TO INVEST IN STOCK MARKET FROM TODAY


How to Invest in Stock Market :- 
I know this is not a new topic for all of you. 
Thousands of articles are already written on this topic.
So what's new in my article related to Stock Market Invest.
Let's go and see...

First of all we have to understand why we do investment in Stock Market.
We do lot of thing in our life since from childhood to till our old age for our upcoming future.  Like from childhood we do study or learn some other activity so that we can earn handsome money at our middle age by getting good job and at our middle do job and try other income earning sources so that our old age will be fine when we are not able to work.

Basically here what we are doing? We are just improving our ability to earn more. What we want. We want Money.

So our moto is clear cut to earn money. We study 25 yrs and then gets a job. We start business and do invest and after it start giving return we get money. But in business we have to invest than expand it by doing marketing of it and several other activity and then we get return and get money. It is applicable to nearly all business. Invest-Marketing-Sales-Get Return cycle is like this.

But Stock Market Invest-Wait-Get Return. And return may be multiple. This asset class is having tremendous potential of earning. That's why people get attracted to Stock Market. To earn  more and more with short span of time. 

But thing looking so simple are not actually so simple. 
Come-Invest-wait-Get Return.  
People learn few things from here and there and open Demat A/c and start trading.
They thought that we have to earn fast today otherwise some other one will take all money and they will not get any thing.

Without proper training, without proper preparation, without proper predefined Risk / Reward ratio, without knowing hedging tools, without knowing any type of fundamental and technical of stock they enter into the Stock Market. And then result you all knows.

So to avoid such situation, you should have knowledge What to do? and How to do?

For any invest to get profit you must know that where I am investing, isn't is right price of investment. If you know the right price than only you can made proper call to invest, at what price and how much profit you want and when to sell it.

Let me clear more to you.
Suppose you want to purchase a ball to sell and make profit. Then at what price you will buy it and sell it. I know you will tell that I will buy it at  X price and sell it at 'X+ my profit price'. But how you know X is right price or not. 

Ok. More specific suppose ball is costing Rs.100. Then you will say I will buy it  Rs.100 and sell it Rs.110 or 120. But ball cost isn't it Rs.100. Confused!

Dear Friends there are two things, First you must know how to calculate the balls actual price and Second thing you must buy it with Margin of Safety.

Now for the time being we find that actual price of ball is Rs.100 than what is Margin of Safety
As we all learnt from Great Benjamin Graham Sir that for moving truck of  1000 tonnes we have make bridge of 1200 tonnes capacity to withhold that heavy load of truck to pass over bridge.
Same way to get profit on ball selling we need to buy ball at Rs.80 to 85.

Then again comes new question Rs.100 cost ball how we will get at Rs.80. Again Great Benjamin Graham Sir told about Mr. Market. When Mr. Market it happy he overprice everything. He quote  Rs.100 ball at Rs.140- Rs.150 and when Mr. Market is unhappy he underprice everything. He quote Rs.100 ball at Rs.80-Rs.85 at that time we have to buy.

So first we have find out original cost of stock by doing stock valuations and then we have wait to buy it with Margin of  Safety. If you buy a ball at Rs.110 - Rs.120 then it will be less chance that someone will buy it at Rs.130 - Rs.140 and if it not sold then you get stuck in it and sold it at less price or hold it till price will reach and missed out other opportunity. But it bought it at Rs.80 than already you have made profit of Rs.20 with Margin of Safety as original cost of ball is Rs.100, now and than market will move the price to it original cost of Rs.100.

Hope you are understand the basics of Stock Market Invest. Don't do blind investment on someone's word that the price will move up and up. Please do your on proper investigation and study when to buy and when to sell it and at what price you have to buy and at what price you have to sell.

Follow the principles of Great Investors. All the best.

Disclaimer - This article is only for knowledge and information sharing and not for any type of recommendation.

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4 Comments

  1. How to calculate the Ball prize?

    It is simple or difficul

    ReplyDelete
    Replies
    1. For calculation of original price of stock we need to learn stock valuation methods.
      It is very simple and systematic.

      Delete

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