7 Questions to Ask Before Choosing the Right Stocks for Investing in the Indian Share Market
The Indian stock market comprises a huge part of the finance sector with millions of investors involved in regular transactions. The increasing number of free Demat Account openings reflects the expansion of the customer base of the market. And if there is one virtue that is common in all the investors, it is curiosity.
One has to be constantly intrigued by the happenings in the stock market to know the areas of profit and investment.
Every stock is subjected to market volatility and thus is more likely to perform inconsistently throughout the year. The stocks that manage to yield fruitful outcomes despite all the external forces are supposedly the best ones to invest in.
So, how can one find the best one out of so many options?
Well, an investor should use his curiosity to scrutinize the market and get answers to some common questions that may help in evaluating the options. He should also opt for a free Demat Account in order to keep expenses under check.
Online trading technologies have made every investor’s life simpler.
This is because, apart from finding the right stocks, the very next crucial step is to open a free Demat Account to store the shares and stock certificates.
For experiencing the best services and convenience open a Demat account.
Some Important FAQs Related To Stock Investments
Investors should consider a few questions and must ask these to the stockbrokers before investing. These questions will help in evaluating the value of stocks to predict their future outcomes.
What are the market conditions?
The stock market is like a sea of investment options and opportunities that goes through the high tides and low tides. A smart investor is one who practices to read the market conditions and contemplate whether to invest or not. And no matter how long one has survived in the industry, it is always important to get this question answered before finalizing a deal. The market is uptrend when the investors show optimism and enthusiasm.
Where is the company engaged?
It is important to know what the company deals in and what are its products and services. The demand graph of a firm’s products can tell a lot about how it is likely to perform in the future. Check out the list of it over the internet and also consult with the stockbroker to understand the details. After all, every investor’s wish is to fill their free Demat Accounts with shares and bonds certificates of companies that are leading the market.
How did the stocks perform in the past?
Whether the company faced any lows in the past or not and how well it recovered from it is efficiently reflected through its previous records. There are not many firms and business enterprises that can conquer the downfalls effectively and the ones that do hold good potential for offering profitable stocks. Also, one can be assured that even if it may see the downside, it will rise so the money is invested in safe hands.
Does the company possess sustainability in the market?
Any company that has the sustainability to fight the market volatility and the recession phase is worth consideration for a trader to invest in its stocks and securities. The network effect, intangible assets, customer switching cost, and advantages must be given a quality check. One may also seek consultation from the DP (Depository Participant) to figure out the statistics of derided stocks. The trading firms or full-time brokers that offer free Demat Account service also help their customers in the decision-making process.
How far have the prices gone?
All the stocks, bonds, government securities, ETFs (Exchange Traded Funds), IPOs (Initial Public Offerings), reach a hike of prices that show their maximum selling worth. The true intrinsic value of the company can be used to see whether the stocks were over-valued or under-valued at a given point of time or not. Subjecting the company to this analysis is crucial to make sure the free Demat Account is also credited with valuable purchases.
How many competitors does the company have presently?
The more a company is exposed to market competition the more it works intending to take business from the contemporaries. Investors should know how potentially a firm is fighting it back to make a space in the market that will yield future profits. If a firm falls or shrinks to this competition, it may not have many investment prospects.
How much is at risk?
Risk is inevitable in the investment market; it is just its intensity that varies from one type of stock to another. Investors should learn to judge the risk factor and decide how much is their risk-appetite. And this aspect cannot be measured on individual advice as one has to decide from a personal perspective.
Every investor must seek appropriate answers to the aforementioned questions to land up in a win-win trade situation. Many investors cringe away from taking the chance because they do not have a clear picture. Strong speculations can help in overcoming the fear of investing in the stock market.