Dear All,
it might sound rude to ask all of you seasoned professionals the below question.For someone who is not able to spend quality time on understanding the stock market would it be advisable to invest via paid profession subscription service like Moneyworks4me, Equitymaster and KatalystWealth?.
Please let know your thoughts.
Thanks in Advance
Hari
It is advisable to make self study and invest rather than go for paid professional service as their recommendations are always delayed and the share might have already grown to a certain extent. Before investing in a share you have to do some homework to be successful . You ask questions yourselves and get answers from various forums
1). Whether your choice company is showing the best earnings growth every quarter with increase from the previous quarters
2). Whether there is increase in sales every quarter compared to the previous quarters
3). The return on equity shows increase every quarter when compared to previous quarters
4). As the institutions such as Mutual Funds and Foreign Investment Institutions hold the bulk of the shares whether your choice company is held by many institutions
5). Whether your choice company is the market leader and whether there are other companies performing better in the peer group. If there are other companies performing better change your choice and analyse them.
6). After having selected your best choice company study the present market trend whether it is bullish or bearish for the subject choice company. You should know some basic rules of technical analysis. You may download free software chartnexus fromwww.chartnexus
.com and update the bse/nse data every market day and study the candle stick charts to study whether there is bullish trend or major reversals.
7). You may make virtual portfolios with imaginary capital in various forums Equity Master , Moneycontrol, Smart Investor, Rediff money selecting the stocks very seriously and study the performance . If you are satisfied with any of the share then go ahead in investing in such shares.
8). You many get advice for buying share from various forums. Ultimately you have todecide when to sell the share. If the share has made its peak growth and the trend is reversing you should sell the share. If the price of the share falls below your purchase price say by 5% take a quick decision to sell the share to cut losses as the larger the losses the higher is the recovery period to get back the break even level. You should understand that there are losses in the stock market which cannot be avoided and you should always be alert and vilgilant to avert and cut the losses. Don’t have any emotional attachment towards any shares and do not hold them for longer periods without any returns. Do not invest in brand shares such as infosys or Maruti just because they are good but see that they are available ad cheaper prices for making profit for you in future.
7). Watch the trend of the share you have purchased on a daily basis using the charts . You can verify offline the charts using chartnexus if you have updated the data regularly. Take a selling decision if there is major weakness found in the trend and the industry group as a whole is not performing well.
8). Nobody can predict the future in the stock market and you can only make money only if you buy quality shares at low price and wait for the prices to increase to the desired level to make profits. Do not hold the shares if the share has appreciated considerably and there is a declining trend. By watching the trend using candle sticks charts you can decide when to buy and when to sell the shares. White bars shows bullish uptrend and black bars shows bearish trend in the Candle stick charts.
9). Do not believe the tips obtained from others unless you test yourselves for the veracity of the statement. Reading more about the stock investing will help in your successful investment.
