#steps to be followed while making investment for beginhttps://thestudysafari.com/investment-in-the-share-market-2022/ners.
> Target Industry : The prime step while making any investment is Industry Analysis in which your investment will grow. You can Consider The points in Industry Analysis are as follow :-
- Read newspapers and see google search and note that which industry will grow in future, you can considers future projects, current projects which can identify that, this industry will grow definitely in future.
- Further, you should consider Government policies and investment on which Government is making investments and made policies to give relief to some particular industry, so that they can perform their task and projects easily.
{Pro-tips : In Indian Economy IT Sector, Green Energy Sector, Real Estate Business, And Infrastructure Sector will grow in next 5 years}
> Selection of Industry : After Industry Analysis you should select industry. In which you have find that this industry will grow definitely in future. I'm just taking example of IT industry and Green Energy, because Government of India target that India will shift from Crude Oil to green energy there fore companies which are dealing in green energy ( Urgaglobal, Suzlon Energy etc) will grow in future in coming 5 years.
>Company Analysis : Suppose you have select a particular company you are interested to make an investment, before making investment in that company you can consider these Points, which are as follow:-
- Promoters Holding :- You should note down that , Is promoters of that company is holding are proportion of share? if they are holding more than 25% to 30%, You can say this is Safest company to make investment, if, in case promoters are not holding any proportion of equity shares / shares we can say that this is very risky company to make investment.
- Profits of Company : After checking promoters holding you should checks the company's past years performance, Is company is making good profits continuously or making loss too? is profits of the company is growing or not? if company's profits are growing every year it is good sign to make investment. If company's Profits are fluctuating means sometimes company is making too much profits or sometimes it is making losses in few years then it is risky company and you should not make investment in that company.
- Debt over the Company :- If company is having no debt or debt free company it's good to make investment in that company. In case company is having debt but have sufficient reserves to make payments during solvency of the company. then it is also good signal to make investment in that company. In case company is having huge debts but does not have any sufficient reserve to write off the debts of the company, then you should avoid making any investment in this company.
- EPS / DPS :- EPS stand for earning per share if company is declaring profits for the equity shareholders then there will be definitely EPS and good to buy these stocks. If company is not declaring any Profits or dividends to the equity shareholders then investor should avoid making any investment in this company, because this is the only source of income for the equity shareholders.
- Capital Appreciation- This is the part of technical analysis of the company which is explaining how company is performing in the share market. If Company is growing by price in the share market investor can buy the shares of this company, because this is the second sources of equity shareholders as capital appreciation. If the share is hitting it's all time high then it is not good time for investment, and vice-versa means if share is available below its book value / face value then it is good time to make huge investment in the company in order to enjoying the future appreciation
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