Stock Shastra

Some people are afraid of the stock market – it’s a gambling den, they say. Stocks move for no reason, and sometimes, they do not move even when there are good reasons for them to. In certain cases, news seems “manufactured” to make the stock look attractive, just before it crashes. Certain companies only advertise on channels such as CNBC-TV18, just so they will be noticed by traders who might buy their stock and make it go up.
While it is true that some stocks are manipulated, the amount of manipulation you perceive is directly proportional to the amount of money you have lost in the market. It is illogical to presume that broad markets are rigged against you if it has given you a compounded return of 12 per cent in the last 18 years; if anything, it has been rigged in your favour.
We’ve never let some of our largest [...]

Baron Rothschild, one of the richest bankers in the world, was once asked at a dinner party if he could name the Seven Wonders of the World. The answer was something that no one expected. He said, “No, but I can tell you what the Eighth Wonder is. The Eighth Wonder should be utilized by all of us to accomplish what we want. It is compound interest.“

Compounding is the best way to create wealth. However, most of us look to make a quick buck and underestimate the power of compounding.

So how exactly does the power of compounding create wealth for you?

A company’s Market Capitalization is an indicator of the scale of its business. Most investors are often in a dilemma to choose amongst large-cap, mid-cap and small-cap companies. A few ‘adventurous investors’ love to invest in small-caps to get more bang for their buck; but there are also some ‘practical investors’ who believe that investing in a mix of large-cap and small cap companies is the way to go.

So, what exactly is ”Market Capitalization”? And how does a company’s market capitalization make a difference when you invest in stocks?

By now you would be aware of the need to invest and also the different avenues of investing. Well done! You are progressing well. While going through the blogs you must have come across two terms- Risk & Return. I am sure most of us have heard these terms. Let’s take a look at what actually they mean.

Now that you know that you need to invest if you wish to see that Volkswagen Beetle parked in your garage, I’m sure most of you must be in a dilemma as to where do you actually invest your money! The sheer number of financial products which claim to offer you great returns at minimal risk is mind boggling! Combine this with the gibberish information given in their brochures and you will be soon rethinking your decision to invest.
The single greatest factor in growing your investment is the rate of return (RoR) you get on your investment and as you will see highest returns are offered by investments that are the most riskiest. Of course there are ways to minimize your risk while maximising your RoR, but more on this later. For starters, let’s see what investment avenues are open to you as a retail investor.
Investment Options Available to you…

Lets [...]