I know you all are in hurry to know about worthy stock market tactics but before rushing directly for all the tactics you should check-outbefore investing your money. Epic Research is one the fastest growing advisory firm. We offer services in Derivative,Commodity,Stock & Currency market to provide accurate trading advice.
Tactic No.1 Only stocks doesn’t matter, Quality Businesses also matter
This tactic is foremost and very first tactic of the 5 winning tactics of stock market
Almost every investor do not recognise the business they are investing in, they just follow brands and symbols of some successful corporates that everyone in the stock market follows which leads them to loss in the stock market and they start shouting that stock market is place of wasting money.
Let us take an example of buying a shop. What will you analyse before buying ?
- How it will manage the change in trends
- Shop’s competition
- Strength of shop’s competition
- Sales consistency
- Overall sales
- Product of the shop
Similar concept should be applied when you are making a choice of stocks. Never think that you are buying only few shares of the company think it as a you thought before buying a shop.
Deep analysis of the below point will help you to understand the first tactic of stock market :
- Price to book value
- Operating Profit Margin
- Return on equity
- Current ratio
- Dividend yield
- P/E ratio
- Debt to Equity Ratio
- Price/Earning Growth Ratio
- Interest Coverage Ratio
- Asset turnOver Ratio
This above points will help us understand
- Worth of the company
- Compare a company with its peer’s
- Financial soundness of the company
Tactic No. 2 Be a Long term investor rather than going for Intraday trading.
Once you have deluded about the quality business it’s now time to make a choice on duration of investment which is the second winning tactic of stock market.
“Buy Right and sit Tight” memorise it as the stock market mantra because this can help you to be in the list of millionaires.
Points to remember in the second tactic
- Because of temporary hype in the market do not get besotted
- Investing in a stock to make quick money can cause a heavy losses
- Be a long term shareholder of a company and do not capitalize on the basis of current news of company
Tactic No. 3 High Bargaining among thousands of stocks.
Before choosing a stock for investment go for in depth analysis about thousands of stocks after choosing the right stock now it’s your time to show your patience. Keep tracking about that stock and invest in it when it is available at a very high bargain price.
Investing in Undervalued stock
Analyzing the fundamentals of the company like revenue, assets and earning, intrinsic value of the company can be found and if this value is greater than the current price then the stock is definitely undervalued stock and it is quite worthy to invest in that company.
It becomes very difficult for an individual to analyse thousands of stocks and choose the right amongst thousands of stocks. In this case, you can outsource this portfolio management scheme to a professional financial planner or wealth manager.
*choose a capable and customer centric wealth manager.
You can also visit Epic Research to find right professional financial planner for your investments.
Third tactics can be achieved if you have patience and time or by outsourcing it to professional wealth manager.
You can be master of third winning tactics of stock market if you remember the below two things :-
- Buying a very good stock at a very least price (Bargain process).
- Have a in-depth analysis of stocks of at least 1000 companies.
Tactic No. 4 “Hot Stocks” stay away and Run towards “Boring Stocks”.
Hot Stocks are those stocks which have attention catching activities such as high trading volume,severe volatility in the share price or when the stock market is in the news.
It is extremely danger to chase “Hot Stocks” and “funds”because every stock goes through non-performance phase and performance phase.
A performance phase will be followed by non-performance phase
Choose a stock which has the potential to perform in a long run and has the performed consistently well in the past long run.
“DO NOT RUSH TOWARDS STOCKS WHICH ARE HOT”
Boring Stocks are those stocks which are not performing well presently or are not in limelight in the stock market and has very least value in the market.
Boring stocks are the plants which we grows with time for better output :
- Boring stocks grow very slowly like plants
- Patience required to wait & see the growth
- But the results of boring stocks are always rewarding
- No move can give a frequent and better results.
Identifying undervalued and unnoticed stock is one of the important tactic to win the stock market.
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Tactic No. 5 Always Calculate the money you will make in the stock market
Before jumping blindly into the stock market first calculate the money you will make after investing in the stock market. It is sure that you will have to make lot of assumptions before calculation, it is difficult but do calculate your profit.
Take into account the expected share price appreciation and the expected dividend
Share price appreciation can be estimated by taking into account the change in Earnings per share and change in P/E ratio.
Return on Equity = Net Income/Shareholder’s Equity
EMOTIONAL BARRIER IN THE STOCK MARKET
- Pride and impatience : Our pride of achieving can sometimes tend us to sell the profit making stocks, so if we can wait longer then the same stock can give us huge profit than before selling.
- Non acceptance : Inability to accept the fact that you have made wrong investment decision for wrong stock at wrong time, make us retain and continue us to make loss-making investments in the stocks which can not give us acceptable amount of profit.
These 5 winning tactics of stock market if applied properly in the Indian stock/share market, they would be your road-map to riches.
You need to have clear route map in the form of financial plan, to strengthen your roadmap to riches.
Do you have any other stock market secret? Do you have any success stories based on the above stock market secrets? Kindly share in the comments section.
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About the Author
I am an engineer on paper but Digital Marketing Analyst on floor. Presently i am working as a Digital Marketing Analyst at epic research financial advisory company located in Indore.
Love to invest time in reading like minded people’s view on Quora.
Keen to learn about Data science