Sunday, December 12, 2010

Investing in Stock Market

Is investing in Stock Market safe? Well.. the answer is both yes and no.

No - if you invest in the market without testing the waters, without adequate preparation and without having an underlying strategy (when to buy, how long to hold and when to sell).

Yes - if you do opposite of the above.

Before one enters the stock market, it is strongly advised that one studies and acquires understanding of the basic terms and concepts listed below:
  • CMP - Current Market Price
  • Bid Price versus Ask Price
  • Stop Loss
  • Intraday (Margin) versus Delivery
  • Buy, Hold and Sell Strategy
  • Short Selling
  • AMO - After Market Order
  • Brokerage and Securities Transaction Tax
  • Technical Analysis - Uptrends, Downtrends, Breakouts, Moving Averages, Highs and Lows
  • Fundamental Analysis - P/E, P/BV, EPS, Dividend Payout History

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