investment in stock markets

Stock markets are very promising area for investments as it can give you smart returns in a short span of time provided you have some basic knowledge about the markets and the stocks.For a new starter or inexperienced it can be equally dangerous too if money is invested without thinking.So in this tutorial we would learn some basic concepts which could be of much help when investing in stock markets.

 MARKET INDICES :-first of all lets us have some knowledge of main Indian market indices called SENSEX and NIFTY.Sensex is stock movement indicator for stocks traded at Bombay stock exchange while Nifty is same for stocks traded at National stock exchange,Delhi. Daily,around 30 shares of different companies are taken and the index is calculated. If the prices of these shares rise on a particular day,we say sensex or nifty are going up and vice versa. 

 SHARE means a share in a company so that after buying a share of a company,the shareholder becomes partner in company,s profits and losses.But that does't mean you have a say in how to run a company.Only an investor who invests large amounts of money in a particular company can have a say in the functioning of that company 

 HOW TO SELECT A STOCK:-

This is the most important aspect of the investment to markets.Most of the people make mistake at this level.Before buying the shares of any company,gather as much information about the company you can,its business history,future prospectus,its profits etc. Keep updated yourself with latest news concerned with that particular company that can affect its plannings.

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HOW MUCH MONEY TO BE INVESTED IN STOCKS:-

 Remember, invest only that much of money in stocks which you can afford to loose.Neve invest huge sums in first attempt.Start with small amounts and see the turn arounds.If you suffer some loss,don't loose heart.Try again and learn lessons from previous mistakes.You'll definitely make profits too if you move carefully.When you get some experience you can invest more money. Investments in equity should be made according to your age.Young people can make upto 70% of their income to equity markets because they can cover the losses if they suffer as they have sufficient time as compared to old age people.It is said that 100-your age=%age of your income one should invest in equity markets.

 PROFIT BOOKING:- 

When you have made reasonable profit in your stocks,take out your money and get out of the market immediately as nobody knows when markets can turn their way.DON'T BE GREEDY.Wait for the next chance and get into the market when appropriate levels are their for buying.Don't do anything in haste,be patient when selling or buying the stocks.If you are not sure about which share to buy and which to leave,sit aside and see what other are doing.Think and then enter the market. Frequent and unnecessary selling and buying should be avoided as you loose sufficient amounts in brokerage.Don't follow expert views blindly as they are sometimes being awarded by some companies to promote their company share or they some other hidden motives although all are not same.Listen and think what they say and do what your brain says.Following these basic facts you can easily make money by investing in stock markets. 

 GOLDEN RULES NOT TO FORGET:-

 1. PUT YOUR MONEY ONLY ON WINNING HORSE(fundamentally strong company shares)

 2.INVEST ONLY YOUR SURPLUS MONEY WHICH YOU CAN AFFORD TO LOOSE. 3. DON'T BE GREEDY,TAKE YOUR PROFIT AND GET OUT OF THE MARKET IMMEDIATELY.