Become Rich with Systematic Investment in the Stock Market

Do you want to rich with Systematic Investment for a longer period of time? Read on...

Monkey Story of Stock Market Dynamics

Beautiful Monkey Story explaining Stock Market Dynamics.. Excellent Read !!! Read on...

Edible Cutlery - Tasty & Eco Friendly Innovation !!!

Watch Narayana Peesapaty & his Team demonstrate a Tasty & Eco Friendly Innovation - Edible Cutlery !!! Read on...

Are you an Investor or a Trader in the Stock Market

It's very important to know yourself in the Market. Are you an Investor or a Trader in the Stock Market? Buy right and Sit tight !!! Read on...

Initial Public Offering (IPO) - The fun begins here :-)

What exactly is an Initial Public Offering? How does it work? Why is it done? Want to know? Read on...

Stock Market Basics - Value vs Price

The Value of a Stock is different from the Price of a Stock. Want to know more? Read on...

Top 5 Questions before investing in a Stock or Business

Hello investors & friends,

How are you all doing? I hope you are all learning by reading the content here. I also sincerely hope that you are passing this on to your loved ones.

Before reading this, please have a look at the Fundamentals of Investing in the Stock Market (Click here to read)

It's result season and the companies which zoomed without reason are getting punished. Also, investors who invested without substance are getting bankrupt - I am serious. There is heavy panic in the retail investing community especially after the Bloodbath in the Markets (Click here to read)

I am sure all of you are definitely invested in a few businesses/stocks in the market or atleast preparing to do so. Is it the Right time to Invest in the Market? Click here to find out :-)

Now, in this article, I bring out 5 Important Questions you need to truely and consciously ask yourself before buying a business or a stock. If you do not have the answers, start finding them out NOW :-) Digest each question thoroughly.

The five basic questions which you need to have answers are the following:

Question 1
Do I understand this business well enough to make a good decision on buying the shares? If yes, what do I know about the business?

This is the raw basic question you need to have the answer for. If you are an expert in one field, stick to it. If you are not an expert in anything, try to look at companies which sell products which you use everyday. When you go to a shopping mall, or watch an advertisement, or eat something yummy, keep your ears and eyes open and see which company is giving you that product. If it is listed, study it.

Question 2
Who are the promoters and their experience in this business? Are they transparent and investor friendly? 

Let me tell you from my experience, that the management is everything in a business. We have seen so many companies rise from the ashes due to a great management. Please remember that even the best companies have gone through hard times. But, if the management is sincere and determined, they will overcome these hiccups. Now, how to do you know if a promoter is good or bad? How do you know their intentions? First, find out who the promoters are. Try to google them and read everything you can about them. Go to Linkedin and see their profiles. See if they or the company has ever been in the news for unethical or bad reasons. Also try to see if they have given dividends which shows their investor friendliness.

Question 3
What is the future for this business?

Friends, please remember that the past is just a guidance but the future is everything. If a company was awesome but the future looks bleak, you are most definitely entering at the worst time possible. So when you are picking the business, try to figure out the future of the business. Every company will have to innovate in order to sustain. Closely observe if the business has a future requirement in the market? Is it saturated? Even old solid companies keep doing new things to keep in pace with the world. This is a very important question to be answered.

Question 4
How has the business fared in bad market times compared to its competitors?

There are times when a particular sector is going through tailwinds or multiple problems. Sometimes, currency issues, slowdown, low demand, bad margins etc can be challenging for any business. How has the company fared when its industry is going through a hard time? Today, there are many companies which are still performing well in spite of their sector immersed in problems. Maybe their margins have reduced. But if their integrity is not compromised, they are doing a great job. This is extremely key in valuation.

Question 5
How much does the business performance depend on changes in micro and macro economic conditions?

The world is never perfect. Sometimes, there are situations which are out of our hand. Geopolitical problems in Europe, Greece finance issues, Unemployment in US, Currency devaluation in China, Slow growth rate, Real Estate Problems, Diseases, Dumping etc have hit the world markets in the last few months. In these times, unfortunately, even the quality companies get punished for no reason of theirs. But their bounce back will be equally quick. Try to keenly observe these movements in the past tough times. Strong companies have a beautiful upward chart if you see the last 10 years.

Now, you need not stop with these 5 questions. But these are the basic ones which you should definitely have the answers for.

Start searching for every possible detail about the company which you can gather. Do not look at the stock with a clean eye. Try to scrutinize it from every angle. I am sure that if you start hunting for information, you will definitely be able to get a lot of inputs. Try to send emails to the company (see the email ids in their website) or call them and bug them. They will respond if you have genuine questions. You just need to be a shareholder to get in touch with a company.

I believe this is the best time to start your research if you have not done it yet. Most of the high quality stocks are beaten by more than 50% from their high. Do not miss this opportunity.

I would also love to help you out in case you want me to review your thoughts. Click here to get my details in About FI page.

If you happened to like this article and want to continue learning, please subscribe for free email updates by clicking on the box below

Please share this post on multiple public platforms so that many more can get benefited and master the art of Investing in the Stock Market !!!

Good luck,
Fundamental Investor

Social Travel - Maybe the next big investment opportunity !!!

Hello investors & friends,

Let me tell you a fairy tale and take you back a few decades :-)

That was the wonderful time when people loved to talk to people, spend time with friends and close ones, enjoy the mountains, trees and rivers, play in the mud, actually got wet in the rain, watch and cherish the beautiful sunset. I remember the time when a Birthday party or Wedding was attended by people watching the event with their eyes and bless wholeheartedly. I also remember times when people loved to experience everything by actually experiencing it :-)

Times have changed my friends.. Today, we spend more time in getting more Likes, Tweets, Shares and Pictures rather than living the experience. We most of the time virtually connect rather than meet up and interact. What are we moving towards?

In this article, I share a nice ad commercial I came across in Youtube by SnG Comedy which shows a business which has enormous potential moving forward, thanks to people's changing mindset. Who knows? Social Travel might just be the next big thing to invest in...

Watch and enjoy :-) This video is also a wake up call for all of us. Lets enjoy the real thing friends.. This world is a beautiful place and experiencing it completely is bliss !!!

Courtesy: SnG Comedy

If you happened to like this article and want to continue learning, please subscribe for free email updates by clicking on the box below

Please share this post on multiple public platforms so that many more can get benefited and master the art of Investing in the Stock Market !!!

You can comment below this article as well :-)

Good luck and keep learning,
Fundamental Investor

Choose the Perfect Stock Broker for Wealth Creation

Hello investors and friends,

Hope you are having a relaxed weekend. This week, let us try to understand a key element in the process of trading or investing in the Stock Market. This is extremely important since you need to know how you are actually able to buy or sell shares which are listed in the exchanges.

We have heard of different kinds of brokers - Marriage broker, Real estate broker, Online broker, Insurance broker etc. Typically if we want to buy or sell a house or property, what do we do? Instead of trying to find potential buyers or sellers, we ask a broker to help us out. What are the primary advantages of this?

1) A Real estate broker is experienced in the Real Estate field and understands its dynamics
2) Broker would have a sound understanding of the Real Estate scenario and hence would have an upper hand
3) Broker would have a good database of Buyers and Sellers since that is his daily job
4) Broker would also be able to help in smartly estimating the value of the deal so that we can save some money
5) Broker would take a commission for helping us out, but it saves us the effort of actually trying to market our property or go house to house on our own to buy one.

So in simple terms, a Broker is basically a middleman, who is an expert in a particular field of service and links the customer and service provider for a commission.

Now, who is a Stock Broker? Wikipedia defines as follows. A stockbroker is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients, through a stock exchange or over the counter, in return for a fee or commission. 

Please note that in India, the Stock Broker or Brokerage Firm needs to be registered with the Securities and Exchange Board of India (SEBI) which is the regulatory body for the fair activity of the Stock Market.

So, if we want to be a trade or invest in the Stock Market, what is the first step? We need to identify a good Stock Broker. The first thing a Stock Broker would do, is to get a Demat account created for us. 

Decades ago, the shares were all in Materialized form. Imagine holding a big file full of Stock Certificates for every stock you own. Those were the days when it was a long process to even check the market prices of a business. It was an arduous task to buy or sell a stock since information was very slowly reaching the retail investors. Also, transparency was not very high in those times.

Those days are over now, thanks to the revolution of the internet. Today, we can all hold shares of companies in a Dematerialized account, where everything is electronic. Once the Demat account is created, the account holder can now invest in the Stock Market by buying quality shares.

There are many advantages of the Demat account:

1) Firstly, there is no physical certificate for the securities/shares. Everything can be seen online with a Username and Password
2) Extremely secure way of holding securities - No risk of natural hazards, theft etc
3) Bonus or Right shares allotted to the investor are credited automatically to the account
4) Dividends are also credited instantaneously
5) Change in address updated in a Demat Account are automatically updated to the businesses we own. Hence any communication (AGMs, Presentations etc) from the company will come to our updated Address
6) Most important advantage is that an investor can check the balance and make trades from anywhere in the world if he/she is connected to the internet.

Now, there are thousands of Stock Brokers in the market today with a huge number of customers transacting through them. Now, I personally have seen and transacted through a good number of brokers and here are a few points which mark a good Broker:

1) I like brokers who are open about their costs. Many of them come up with lots of offers etc. and they swindle you with some hidden costs later on. It is good to get to know what is the Account Opening Fee and Maintenance Fee moving forward. 
Remember to Read the Offer Document Carefully Before Opening an Account with the Broker.
2) A Transaction Fee or Brokerage is the commission the Broker takes for every transaction you make through them in the market. So its good to compare the Fees with various brokers before making a decision.
3) The Brokerage is generally different for Intra Day trades, Commodity Trades, Futures/Options and for Delivery. So you need to choose a broker based on your needs. For this you need to know yourself very well. Which category do you fall in :-)
4) Its always good to choose a broker who gives you a very good User Interface. By this, what I mean is, there are many brokers who make it very difficult to see your portfolio, make a buy or sell, check the current price, charts, make account transfers etc. Its very important that we choose a broker who makes our transacting life easy and simple. Some brokers whom I know have an extremely easy to use User Interface and it gives all kinds of information to the user in REAL TIME
5) Profit and loss statements (Long term and short term capital gains/losses) are very very important for paying tax every year. I have seen only a few brokers who focus on calculating this accurately for the investors. Especially, when we have bought a share during one Financial Year and sell it within one year in the next Financial Year, it becomes extremely tricky to calculate on our own. Here, good brokers stand out since they do the calculations for you and help out.
6) Its good to choose a Broker who has a good customer care support. This is very important since Service is very vital in this business. Sometimes, we need their support when we never get it :-)
6) Finally, it is important that the broker has a good reputation in the market. A seasoned Brokerage House is much more advised compared to a new one. This is because, there have been instances in the past where Brokerage Houses which are functional suddenly disappear. Today, the chances are less since SEBI ensures that these kind of things do not happen. Everything is more secure and transparent.

Please remember that a Brokerage which is extremely cheap might not be the Best. Do your homework well.

So what you are you waiting for... Pick the RIGHT Stock Broker and open your Demat Account now. Get in to the wonderful World of Investing and Wealth Creation :-)

If you already are registered with a broker, it is worth to see if it covers all the points mentioned above. If not, see if you can move to a more user friendly broker.

Wish you all the very best my friends. Enjoy your Sunday.

If you happened to like this article and want to continue learning, please subscribe for free email updates by clicking on the box below

Please share this post on multiple public platforms so that many more can get benefited and master the art of Investing in the Stock Market !!!

You can comment below this article as well :-)

Good luck and keep learning,
Fundamental Investor

Is it the Right time to invest in the Stock Market?

Hi investors & friends,

How are you all doing? In my interaction with various kinds of investors, one of the most common questions I have come across is, "When is the right time to invest in the Stock Market??" Whether the stock market is bullish or bearish, this question always stays in our minds. When the markets rally, we ask this question since we fear the fall of the market. And, when the markets fall, we ask this question since we fear further fall. We are confused at all times. 

We all love to buy at the bottom price and sell at the highest price. Do you think this is practical? You will not find a single person in the world who has consistently timed the market. If someone claims that, he/she is surely lying. Whether, you are a Technical Expert or a Guru in Charts or a so-called Expert who gives targets on television or a blind follower of the above, I want you to gracefully, cautiously and humbly accept and digest the fact that it is foolish to even think that you can time the market. It is IMPOSSIBLE :-) 

So, what is the realistic approach? What is possible? What can be practically achieved?

Click here for the Basic Fundamentals of Investing in the Stock Market

Firstly, I want you to understand what Investing is. Investing is a lucrative process which needs to be habitually cultivated from the time you begin earning your first income. Please remember that you are investing for yourself and your future. You need to sideline a realistic part of your income every month and save it for your future goals and needs. Invest with a purpose. That's important !!!

From historical data, wise equity investments in solid companies have proven to be major wealth creators in the long term. Yes, not 1 or 2 years of consistent investing, but people who have habitually invested for 5 to 10 years in sound businesses have created crazy amount of wealth. When I say Crazy, I mean it. They have created wealth which can take care of generations and I am not kidding. They are the ones who did not get affected by the small turbulences of the markets, but instead focussed on the business and its prospects. They did not make their decisions based on TV Headlines, Experts, Brokerage Houses, Emotions etc. 

They just followed up the business and that's about it. If the business did well, they kept investing or stayed invested. And when the business consistently started slowing down, they kept their emotions aside and booked out. Click here to see how Warren Buffet approaches the market

In the last month, the markets have fallen globally. We have had geo political crisis in Europe, Slow growth rate in China, Employment problems in multiple parts of the world, Economy slowdown etc. I am still proud to say that India has managed to progress pretty well with these turbulences. With the able leadership at the Centre, things are slowly moving towards the best. 

Personally, I am not surprised that Nifty/Sensex has corrected to this level, given the fact that H1 results were not very good. I had advised a lot of close investors and friends to keep cash in hand and wait. The wait is proving fruitful now. Click here to read about Bloodbath in the Markets

So, when is the right time to invest in the stock market? My dear friends... This might surprise you, but if you are going to invest with a long term horizon, and if you know that the management and employees of your company are doing their best, the RIGHT TIME IS NOW :-)

Yes, you heard it right. Every moment in the Stock Market is an opportunity if you are long. But, you need to do your homework and pick good companies. Believe me, there are tons of them out there. The opportunities get better when markets fall, due to fear, and market prices of good companies also fall without a reason. 

Friends.. What's the bottom line. BE FEARLESS !!! DO NOT TIME THE MARKETS !!!

Pick your companies well and I assure you that you will be rewarded in the long term... Don't bother if you bought a solid company and the market price is falling without a fundamental reason. Many times, our pockets are not deep enough to keep buying when a stock falls without reason. You are not alone. If a stock falls without change in fundamentals, it is bound to come back. Keep a strong mind.. 

Start investing for yourself, my friends.. It's the best gift you can give yourself. Stay long.. Stay blessed !!!

If you happened to like this article and want to continue learning, please subscribe for free email updates by clicking on the box below

Please share this post on multiple public platforms so that many more can get benefited and master the art of Investing in the Stock Market !!!

Good luck,
Fundamental Investor