6 Replies to “Which points should be taken into account while investing in share/stocks?”

  1. Someone knowledgeable about the market would invest in individual stocks.

    Someone with very limited experience will be advised to buy a mutual fund.
    Plus, companies will push their own mutual funds – since it makes them money.

  2. 1)do selection of stock after its fundamental research.
    2)be aware about the management group and policy, record of dividend and bonus, corporate governance.
    3)invest after technical analysis and movement direction of the stock in particular and national and global sentiments.
    4) last but not least is to keep constant watch and ready to book lose/profit if stock is not doing well as per anticipation.
    a small investor may not follow all process efficiently.to save from botheration,advising to invest in MF is easy task for him to invest and gain in share market.

  3. Investing in a family of funds rather than one company stock offering is better simply because you spread the risk factor somewhat.
    If you invest for long term it is wise to go the mutual fund rd.
    Please Rate

  4. most people are encouraged to invest in mutual funds because it is a passive form of investment. What this means is that very few people have the intellectual framework and skill to actively pick their own stocks so because of this deficiency, they should turn over their cash to the more competent money managers in mutual funds. But if you fancy yourself the skilled stock picker, go right ahead and pick your own, who knows, maybe you will beat the market. For the privilege of having skilled money managers work for you, you have to do with lower returns because they have to pay themselves from the returns got from the investing ventures
    When picking individual stocks this is what you basically look for ( a similar qn had been answered so there might be a slight similarity in the answers)

    -the current ratio: this is the ratio of the current assets and the current liabilities. The minimum should be 2:1

    -The rate at which earnings are growing. A minimum increase of a third in per share earnings for the past 10 years or more using at least three year averages is recommended.

    -the P/E ratio; ratio of the price of a stock to the earnings in the previous years. This P/E ratio should not be more than 15 i.e. the current stock price should not be more than 15 times the average earnings for the past three year averages.

    -the price to assets ratio. The current stock price should not be more than 1.5 times the book value of the stock as reported in the latest financial statements (I will describe how the book value is calculated very soon). A rule of the thumb suggested by Benjamin Graham in his books is use of the multiplier i.e product of the number obtained by dividing the current stock price and its earnings (in this case it is 15) and the price to assets ratio(in this case 1.5). This new number should not be over 22.5

    After ascertaining its financial strength, the next thing is to find out its earnings stability. The company should show consistent earnings for the past decade or more- particularly if it has undergone an economic upheaval and still sustained its earnings.

    The next thing is to look at the dividend record of that company. The same rule goes but in this case they should be uninterrupted for at least 2 decades.

    othe factors to look for before investing in any company are;

    General stability of the company- in value investment circles, this is measured by the maximum decline in per share earnings (how much each share earns) in any of the past say 7 years, or any figure that you please as against the average of the three preceding years i.e. you have the per share earnings of a company going back 7 years from now. Take the average of the earnings of the preceding 3years and use it to measure how far the earnings have decreased or increased in each of the last 7 years. Increase or no or little decline is favorable.

    General growth of the enterprise. This should not be explosive over a really short time because a company whose growth and earnings increase in biblical proportions, like growth stock have the tendency of falling away in the same fashion(am thinking the tech bubble in the nineties). It is better to invest in companies that have satisfactory growth record over a given time say 7 years and have shown fairly good performance in bad times(this are mostly blue chip stocks)

    Profitability- a lot of profit is always an attraction to investors since they are mostly followed with high annual growth rates in earnings per share. This is more often than not a show of the general strength or weakness of the company. The company has strong fundamentals if the profitability goes on for a fairly long time. Lets be real, there is no way that you will want to pick stock that is and has been unprofitable for its investors

    The stock price variation over the given period- an investor is inclined to stocks that have had a favorable increase in price over a given period over those whose prices have remained stagnant or have fallen for no good reason

    Dividends- It is not of utmost importance since many big companies do not give dividends. But if you finding one that is giving them is an added advantage to any investor. I mean who wouldn’t want an extra check in the mail every quarter

    The industry that the company is in- there are some industries that are more are more poised for more profit than others and while this is something that the investor has to consider, he must mot spend too much of his time looking for the next big thing since there is no way of really predicting what will happen in the future and so he should concentrate on things that are quantifiable.

    I hope this has helped you in some way

  5. Dear,

    I strongly not agree with u ,
    Because all are mutual fund are make fool clients i have proof

    so my recomended is tht dont go for any mutual fund,

    If u want to investment ,go choose any other thing ,

    i HATE mutual funds .if u want to more abt mutual fund and knw abt PROOF then contact me dear

    For more info related to stocks and investment talk me on messanger

    MY yahoo id:ravimail2005

    Dont worry.Its free for u only ,


  6. Hmm.. stock market investing, investing in shares, or buying stocks, remember history teaches us how to invest, when to invest, and where to invest. The best points I found investing in shares are freely available on inspirational investing ideas. The first link article covers all the points when investing into shares or stocks, from the best method to invest into shares, investing in shares, what a share is, owning shares, buying and selling shares, capital growth shares, to owning shares. The second link on buying stocks covers points such as starting to buy stocks, benefits, return on investment, stock valuation, points to consider and many more ways to invest money. Definately worth clicking and reading in my humble opinion.

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