Share Market Fundamentals
When we go to market
for shopping for anything, we go to different shops to identify the prices and
qualities of the product which we want to buy. We do research from the
different market/stores which product to buy from which store. But when we want
to buy shares from the market, we are asking to others which shares to buy
rather than doing our own study. It’s not bad to take suggestion from others
but we also need to do some research about the company where we want to put our
hard earn money. We must have some sorts of learning attitude if we want to
stay in a market for longer periods. Some of the indicators that we need to
look before investing are:
- Earnings per Share
- P/E Ratio
- Return on Equity
- Return on Total Capital
- NPL (Non-Performing Loan)
- Non-Operating Income
- Provision for Possible Losses
Some
of the Tips learned by me from the markets as:
- Invest what you can afford to lose
- Choose highly liquid shares
- Trade only in 2-3 scripts at a time
- Research watch list thoroughly
- Fix entry price and target levels to exit
- Use stop losses to reduce the further losses
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