Swastika Investmart

  Investors hoping to maximize their gains try to identify stocks that are mispriced, creating long opportunities for under-priced companies and short opportunities for overpriced shares. Not everyone believes a stock can be mispriced, particularly those who are proponents of the efficient markets hypothesis. Efficient markets theory assumes that market prices reflect all available information regarding stock and this information is uniform. Such observers also contend that asset bubbles are driven by rapidly changing information and expectations rather than irrational or overly speculative behaviour. Many investors believe markets are mostly efficient and some stocks are mispriced at various times. In some cases, the entire market can be pushed beyond reason in a bull or bear run, challenging investors to recognize the peaks and troughs in an economic cycle. Information on a company might be overlooked by the market. Small-cap stocks are especially prone to irregular information b...

  Day Trading refers to market positions which are held only a short time; typically, the trader opens and closes a position the same day but positions can be held for a period of time as well. The position can be either long (buying outright) or short (“borrowing” shares, then offering to sell at a certain price). A day trader or intraday trader is looking to take advantage of volatility during the trading day, and reduce “overnight risk” caused by events (such as a bad earnings surprise) that might happen after the markets are closed. Day trading got a bad reputation in the 1990’s when many beginners began to day trade, jumping onto the new online trading platforms without applying tested stock trading strategies. They thought they could “go to work” in their pyjamas and make a fortune in stock trades with very little knowledge or effort. This proved not to be the case. Yet day trading is not all that complicated once you learn a simple, rules-based strategy for anticipating mark...

  Individuals who want to invest in equities need to understand the risks associated with investing. Investing in shares can be highly lucrative and can set you up for a bright financial future. However, understanding the risks and benefits associated with buying shares is a crucial step for your education. What are the Risks of Investing? Investing in shares, like any investment, comes with a certain amount of risk. Shares are often described as ‘high-risk asset classes’ when compared with other types of investments. The primary risk of investing in shares is that it can result in loss of capital. Unexpected events outside of your control or negative developments within the company can significantly affect share prices and the value of your portfolio. In saying that, this is not to scare you away from investing in shares, but merely a necessary understanding that all investors must have. How Can I Reduce the Risk of Investing? There are ways to reduce the risk associated with inve...

  Investors are more likely to sell a stock with a profit and less likely to sell a stock at a loss. Although this may seem counter-intuitive, it is in line with studies of how investors in the stock market make decisions. It seems we are more likely to take a small profit (something concrete) than sell at a loss, which confirms our mistake and closes the door on a possible rebound. There are good reasons to sell at a profit, but there is seldom a good reason to hold on to a confirmed losing stock. The fear of turning a “paper loss” into a real loss is strong. When is a good time to sell a winning stock? Some would counsel never to sell winning stocks, while others caution that selling is a deliberate process just like buying. Say you have a stock that had a good run and now you wonder whether you should take your profits and run or wait for a sign that the stock is about to reverse direction. There are several warning signs that can tip you off to changes that may mean the price i...

  It seems fool proof – buy calls when you’re bullish; buy puts when you’re bearish. You know how much you can lose from the moment you initiate the trade. But, more than 75% of stocks trade sideways over the long haul. That means only a quarter of stocks make a noticeable move up or down in a given time frame. And what do you need when you buy options? Movement! Sellers, on the other hand, love “stuck” stocks. Trading ranges are profitable territory for sellers. Plus, they know how much they can WIN upfront, because they hit their jackpot, the moment they make their trade! If you have better things to do than to hope the underlying stocks move enough to make your long options profitable, I’ve got five rules to help you sell options for profits. Rule 1: Use your whole account to trade, even if it’s a small one Most buyers (even the seasoned ones) are prepared and expect to lose some of their money and are OK walking away with empty pockets. To start winning consistently, you must g...

  Some traders and investors denounce technical analysis as a superficial study of charts and patterns without any concrete, conclusive, or profitable results. Others believe it is a sort of Holy Grail, that once mastered will unleash sizable profits. These opposing viewpoints have led to misconceptions about technical analysis and how it is used. Some misconceptions about technical analysis are based on education and training. For example, a trader trained in using only fundamentals may not trust technical analysis at all. But that doesn’t mean someone who is trained in technical analysis can’t use it profitable. Other myths are based on experience. For example, the incorrect use of technical indicators leading to losses. That doesn’t mean the method is necessarily bad, possibly the person just needs more practice and training. Yet, other myths are perpetrated by marketing, promising overnight riches if a simple indicator is bought and used. Rarely is it that easy.   Technica...

  How much of your portfolio should be in stocks? There is no set-in-stone rule, but generally speaking, as you get older and closer to retirement, you should reduce your exposure to stocks in order to preserve your capital. As a rule of thumb, take your age and subtract it from 110 to find the percentage of your portfolio that should be invested in stocks, and adjust this up or down based on your particular appetite for risk. Index funds vs. individual stocks An index fund allows you to invest in many stocks by purchasing one investment. For example, an index fund gives you exposure to all 500 stocks in that index. Index funds can be an excellent tool to diversify your portfolio and reduce your risk. After all, if your money is spread across hundreds of stocks and one crashes, the impact on your overall portfolio is minimal. How many different stocks should you buy? If you only want to buy individual stocks, I suggest buying  at least  15 different stocks across several ...