Sunil Seth
Post “Demonitization”; stock investing which previously was having an element of risk because of infusion of unaccounted money, has witnessed a diametrically opposite scenario now. Markets experienced a steep fall followed by a gradual rise posing great confidence in the move of “Demonization” by the PM, Mr. Narendera Modi. Everybody associated “Stock Investing” with “Gambling” which was partially true also. As there being a constant fight between “Bulls” & “Bears” (terms used in stock market); predominantly dominated by the big investors like Foreign Institutional Investors (FII); domestic Intuitional Investors (DII) & High Net Worth Investors (HNI) where millions of rupees were being pumped in at the click of a button as there was no check on money being pumped whether accountable or not. Anybody with huge pile of money could move the market up and down. Post demonization, FII’s withdrew millions of rupees from the Indian Market which was countered by DII’s reinforcing the faith in Indian Market as expressed by the Govt. time to time with regards to “Make in India” concept and India being a big “Consumer’s Market”. Digitization, leading to accountability at every step, has resulted into predictability in the Stock market despite it being a High Risk Appetite field. Moreover, the various investment fields previously sought after likes; Real Estates; Infrastructures; Banking sought of as greener pastures for investment growth have seen a dark phase after the act of demonization leaving no alternative for the investor community but to repose faith in Stock Invesing. Another advantages with investment in stock is that it can be started with a meager amount and income being totally white to be taxed for “Short term gain and Tax free for “Long term gain”. Also, the act of Digitization has made it possible for an investor to manoeuvers anything and everything from buying stock to selling the same at the click of a button giving flexibility to operate it from any and every niche and corner of the earth. You are always connected through the mode of internet for its easy and effective control. Moreover only electric gadgets like Mobile/Tabs/Laptop with internet facility is needed for its smooth operation favoring you to start investing without needing heavy investments for the office / human resource establishment. It is a one man’s game now-a-days. Icing on the top is the availability of software giving u an insight into the process of identifying potential stocks. Plethora of information is available with you just at the touch of the mouse. The only thing needed is to identify the potential of the company you want to invest in; to scan the information like a doctor to diagnose the disease and then prescribe the medication accordingly. Also the fact that no one on this earth can time the market. The decision to buy and sell the stock at the appropriate time becomes the most delicate and utmost feature of “Stock Investing;. Decision making needs ultimate precision. Basics of stock investing says that 80% of the profit flows from 20percent of the stocks. To buy a stock which will always rise is next to impossible. One has to be mentally prepared to keep himself conditioned whether the market is “Bullish or Bearish”. Now-a-days a new job opening in the name of “Wealth Managers” has come into existence. They employ the modern tools i.e. stock investing software; information flowing time to time; communicative software to generate the parameter, based on which they are able to take decisions to buy or sell the stock to pile up wealth, thereby, reducing the element of risk further. Now it is becoming a scientific forte, which previously it was not. Analyzing a stock is like diagnosing the medicine which will best suit to invest in a particular. Stock analysis involves study at the fundamental / technical psychological land.
* Fundamental analysis involves with the product / services; demand / supply of the product a company is manufacturing; management to deliver to the market and generate revenue thereof.
* Technical Analysis involves mathematical tools like SMA (Simple Moving Averages); DMA (Differential Moving Averages); MACD (Moving Average Convergence Divergence); Candle sticks; to name a few among the big list of parameter on which any stock can be weighed to initiate decision of buying or selling.
* Last but the not the least is the psychological Analysis which can be explained keeping in view the News flow whether in favour or against the market environment; insider trading; threats like earthquakes; wars; epidemics; the only factor responsible for element of risk / gambling in the stock market right now.
Top it all the above as analysis, it is going to be the best instrument of Investment in the times to come keeping in view its flexibility with respect to the capital; with respect to manoeuvering occurring; with respect to human resource and establishment required keeping in view, India being a big “consumer market and its “growth story”. The only thing needed is change in perception towards the “stock investing”.
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