Investment opportunities in the Indian Stock market:

Shares give us a wonderful opportunity to grow your wealth. There are many ways to earn money through investing in shares. Firstly, when you buy a stock and hold and it appreciates in value, in other words, when your stocks price goes up that means people are ready to pay you more for your stocks than you had spent on them. But always keep in mind that if you hang onto a stock that has gone up in value but you have not booked your profit yet it’s called unrealized” gains. You can only realize your profit only when you sell your stocks. Because stocks prices fluctuate often, you never really know how much you’ve made until you sell your stocks.

Secondly, you can earn the dividend from the companies every year or half-yearly depends on the company you are holding. As a part owner of the companies whose stocks you are holding. They always love to pay dividends to their shareholders when they are making a profit from their business.  This acts as a source of consistent income.

Many companies also issue bonus shares. Companies often reward their shareholders by offering them bonus shares. In most cases have noticed that stocks prices move up when a company offers bonus shares to their shareholder. For example, a company announces 1.1 bonus shares to their shareholders that mean shareholder will get one share for each share held by him. If someone is holding 100 shares then he or she will get more 100 shares. The shareholders don’t have to pay for these additional 100 shares.

Investing in stocks also give you divisibility where you sell a part of your shares in case you require cash for some purpose. Others investment instrument don’t offer this. You can also buy and sell shares in a day, next day and so…

The main goal of investing in share market is to earn profits. You can earn money from the long and short-term investment. What you also need to follow while investing in stock market is latest news of the share market, what is happening and the economic and commercial scenario of our country. You have to identify the present best performing sector and industry. Choosing the top industry and stocks in the main aspect when you are investing in shares. To choose the best stocks for the investment the investors need to study the financial strength of those companies by analyzing EPS, revenue, the liquidity of the company, debt and the valuation of the company. Once you identified the best stocks for the investment you can then buy your stocks for investment and earn dividends and bonus shares.

Invest your hard earn money with blue-chip companies:

It is up to you whether you want to invest your money like a tortoise or a hare. Hare investors always buy high flying stocks to earn quick money while tortoise investors always go for steady blue-chip companies. But the fact is the tortoise investors always win in the long run.  Hare investors may win the quick profit in the beginning but in the long run, hare investors tend to fade. It is also true that all blue-chip companies are not same. Some blue-chip companies always do well in the market if you check the history and other blue chip companies do not perform well as you expect. You need to look at the balance sheet of the companies you are interested to buy. Check if the companies change their management that would impact future results of those companies.

Diversify your investment:

Diversification is an effective way to reduce risk. If you put all your eggs into a single basket you may lose your money badly. It is recommended that you at least investment in 4 to 5 blue chips stocks because out of those 3 to 4 may perform very well and 1 or 2 may not do well. This always helps you to reduce your risk and stay profitable. A diversification strategy can help you achieve more steady returns over time and cut down your overall investment risk.  Blue chip companies with stable revenue streams tend to be considered lower risk and more likely to pay regular dividends to their shareholders. Blue chip companies have strong management that will tend to make the right moves to compete in a changing marketplace. The top blue-chip stocks offer a smart combination of low p/e’s (price-to-earnings ratio), stable or rising dividend yields (annual dividend divided by the share price), and promising growth prospects. You may have a higher or lower tolerance for risk in your portfolio depending what type of investor you are. You may love to be an aggressive investor. So before you buy your stocks always research the sectors and stocks you are buying you also may ask your financial advisor to guide you in this matter.