Equity |
September 16, 2018How to Start Equity Trading?
Equity shares represent the form of fractional ownership in a business venture. Equities have the potential to give high returns and to increase in value over time. Equity trading indulges a high risk though higher the risk, higher the returns! Research studies have proven that the investment in equity shares with a longer tenure have yielded the superior returns than any other investment. High risk also indicates that the investor stands to lose some or all his investment amount if the prices move unfavorably. One has a need to study equity market and the stocks very carefully before investing. As equity is considered as most rewarded asset class over time to beat inflation and to generate real returns.
To start online equity trading one has to open a demat and trading account with an authorized and registered stock broker of Securities Exchange Board of India, make sure your stock broker do not deal with unregistered intermediaries. Decide to trade in equity stocks according to your risk appetite and transfer your funds to your demat account. Diversification is a risk management technique that mixes a wide variety of investments with in a portfolio. It is designed to minimize the impact of any single security on overall portfolio performance it’s really just the simple practice of not putting all the eggs in one basket, if you spread your investments across various types of assets and markets you will reduce the risk.
Take informed decisions by studying the fundamentals of the company, find out the business the company is into, its future prospects, quality of management, past track records. Do not get misled by market rumors, luring advertisements and hot tips of the day. Be cautious if there is any sudden Spurt in price or trading activity. Ensure that you receive contact notes from the broker within the 24 hours of the execution of the trade. Every investment has some kind of risk so be careful, invest in a manner that matches your risk tolerance.
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