Jesus answered them, “It is not the healthy who need a doctor, but the sick. I have not come to call the righteous, but sinners to repentance.”

13 Dec 2017


Hi Friends,   The most important thing to remember before making any kind of investment is the current financial scenario of the investment destination-whether it is bank accounts, fixed deposits or in the stock.  These do not operate in a financial vacuum and are notorious for their illusive speculative-ness and other malpractices.  Reading , understanding, observing and internalizing market trends is an art-an art which can be perfected only after years of practice, patience and fortitude.  It is no child’s play and small investors with no experience of stock trading can be easy target for frauds.  Hence, it is extremely necessary that the investor  keeps an eye on the market, learns its operational norms, peculiar institutional behaviour and uninsured risks. Only after the investor, with or without the help of professional advisors, executes this plan of action can he/she hope top make any headway in terms of profits.

However the ground reality seems to be different.  Elated by the realization that they understand market jargons with the help of written material, investors indulge themselves in ill-advised dealings and end up incurring heavy losses.  Therefore, in order to  pick good stocks, it is important to read and understand the current market scenario in detail.

The next step, in the process of picking good stocks to invest in, is the knowledge of financial record of the target company.  Companies and corporations, however big or small, have often been found of malpractices while dealing in the stock market and hence it becomes absolutely essential for investors to run a background check before making any important investment decisions.  Before picking a stock for investing one’s money , one must determine the parent company’s moral and practical standing in the market, its production performance in the recent past, its record with the Securities and Exchange Board of India (SEBI), its current situation and future plans of expansion in business and production.  Only after a careful consideration of all  these factors can one hope to make a truly informed decision.

Another factor to consider before arriving on the final verdict is the ‘Price: Earnings ratio.’  This ratio is one of the simplest of parameters to analyse the financial reliability of one’s investment destination and can be very useful in picking good stocks.  However, it has to be analysed with the assistance of professional advisors with the clear notion that in itself, it cannot guarantee financial returns.

The financial performance of the company selected by investors should also be known.  Debt equity ratio must be known.  Promoter pledging of shares if any, and if answer is yes  what percentage.  In the present market condition debt free company is better to invest.

Good Luck.                                                           See You Later

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