What are the things, We should know before investing in the stock market?

Investing in the stock market is done in many ways, now it depends on you what kind of investment you want to invest like

1) For Positional investment: This investment is for a minimum period of 1 month to 3 months.

2) For Short term investment: This investment can be at least 1 year to 5 years

3) For Long term investment: At least 5 years to 20 years old

It is now up to you to decide what kind of investment you want to invest in. If you want to make small investments then you don’t need to do too much of a thorough investigation about the company like if you want to make a positional investment. Meaning like today you bought a stock and sold it within 1 month, then there you just see how much profit this stock is going to give, then you buy the same staff and sell it after earning some profit.

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If you are going to invest for a long time, then there you will have to take care of some big things, although there are many things, If you take care of these big points, then you will be able to make a good hold in the company.

Management of Company

This is very important and many people do not pay attention to it because they are not able to investigate it properly because it is not so easy to check about the management of the company, according to me, you know about the management of the company.

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To know this, do some research yourself, because if the management of the company is good, then it will take the company out of losses and bring it to a profitable company, so do not ignore the management of the company at all.

Management is a very important part of any company, especially for the investor because the investor wants to invest his money in it.

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Business Model of Company

Meaning what does the company do and which products it makes, who is the company’s competitor in the market and what is the growth plan of the company, that means, where does the company want to take itself after 2-3 years or at least 5 years.

Pledge Shares

This means that there are many websites that have pledged shares, you can check it there by putting the name of the company in them, if the shares of this company are pledged, then any company has pledged some part of its share somewhere. This will not be good for the company, as you can understand it in such a way that if a person has mortgaged some of his house items somewhere to meet his needs, then you can find out the value of that person, accordingly the company’s Even the value is known in such a way that if the shares of that company are pledged somewhere, then that company will not be considered good, although if a small part is pledged then it happens, but if a lot of part is pledged then that company is not good for investment. You can stay away from such companies.

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Company’s Share Holding Patterns

Share Holding patterns can be seen on the company’s website, many companies do not put it on their website, then on other websites, you can see who has bought the company’s shares, If the company’s shares have been bought by mutual funds or FII’s (Foreign Institutional Investors ) has bought, then the company will be considered fine, this company has been researched by many companies by one of their research team and after that, they have put money in it here and they are confident that the company will give some return.

So If mutual fund companies are not putting money in a company then you can have a little bit of satisfaction that this company is good and worth investing in but it is also no guarantee that if another company invests money in that company If the company is good, then you should increase the scope of your own research.

Author

FinFormula was founded by Nikhil in 2020. I am a Investor in the last 4-5 years. I am writing here about Stock broker review, IPO investment, Stock News, Stock Results, Mutual fund, Broker comparison, Crypto Currencies, Technical analysis, Fundamental analysis, Personal Finance, and my experiences.

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