Stock Market Investment Strategies - best stock market quotes

Here is my collection of famous stock market quotes to keep in mind before trading on the stock market. Some of them are very useful.


Be fearful when others are greedy, and be greedy when others are fearful.
Warren Buffett


The stock market is simply the transfer of wealth from the impatient to the patient
Warren Buffett


It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.
George Soros


I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
Warren Buffett


Only buy something that you'd be perfectly happy to hold if the market shut down for ten years.
Warren Buffett


If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.
John (Jack) Bogle


Put not your trust in money, but put your money in trust.
Oliver Wendell Holmes


Money is like manure. You have to spread it around or it smells.
J. Paul Getty

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news updates 26 jun

Inflation raises marginally but still remains at sub zero levels. Inflation based on the wholesale price index remained in the negative zone for the second week in a row now. Inflation had dipped to negative in early June 2009 for the first time since 1977-78.

Crude oil price also breached the 70$ mark again. 

All regions in the country, where the monsoon has arrived, saw subdued rainfall for a couple of days immediately after the arrival of monsoon. A deficiency in rains is certain to adversely impact the productivity and prices of cash crops.The prices of these crops have been raising, and if the country fails to get enough rains soon, they are expected to become expesive.

Nandan M. Nilekani, one of the Board of Directors of Infosys, is all set to join the Central government, as chairperson of the Unique Identification Authority of India(UID). This is a new agency set up to provide UID numbers to all citizens for accessing various government services.Nilekani has been chosen to head the authority considering that the project will be based on techniques of Information Technology and there will be need to keep updating the system.

Tata Communications has bagged a voice services five year outsourcing deal from British Telecom worth about $300 million.

Stock Market Investment Strategies - All about stock market

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Stocks
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Stocks trading

Short selling

Key terms to watch in a stock

Multibaggers

IPO

Basics

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Mutual Funds
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Growth or Dividend

Tax saving

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Secondary

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Derivatives

Call option

put option

Futures

Stock Market Investment Strategies - Short Selling

Short selling is the practice of selling a share that the seller does not own at the time of the sale. Short selling is done with the intent of later purchasing the same at a lower price. The difference thus obtained from selling and later buying the share at lower price gives the profit.

If you want to short sell shares then you need to buy back the same shares by the End Of the Day(EOD). This is because short selling of shares is possible only for intraday transactions. If you fail to buy back the shares then it is possible that the broker would buy it at the auction before the EOD.

For example: lets say you sell a share at 100 and later on the same day you buy back the share at 90. This means you have earned a profit of 10 from this transaction(assuming no brokerage charges :-)). The only difference with normal trading is that the selling happens before you buy it. Lets take the same example again and you have sold the share at 100 but instead of the price falling, it instead rises to 120. In this case you will have to close this transaction and buy back the shares by the EOD even if you have to buy it at a higher price than what you have sold it for. If say you buy back at 120 then you inherit a loss of 20.

Short selling is useful if you are sure that the prices is going to fall. Thus you can make profit in share market even when the share price/ stock market is going down. However, remember that these kind of transactions are very risky.

Stock Market Investment Strategies - Mutual fund plans

Every mutual fund scheme comes with two types of plans.

Dividend plan: The investors opting for the dividend plan get dividend whenever the mutual fund declares dividend in the particular scheme. As a result, NAV of the fund falls by the amount of dividend declared. For example, if the NAV of the fund is Rs 100 and the fund house declares a dividend of Rs 10 per unit, then the NAV of the fund will go down by Rs 10, i.e. new NAV becomes Rs 90, since that amount gets distributed among its holders.

If you are looking for income then you can go for this plan. It will also help you book profits from time to time and thus protecting your investment from a sharp fall in the share market. Remember, returns on dividends are not guaranteed, so dont depend on it for regular income.

Growth plan: In growth plan, the investor does not get any dividend. Rather the NAV goes on increasing, generating capital appreciation. For example, if you have invested Rs 100 in a fund, whose NAV is Rs 50, you are allotted 2 units of the scheme. In the growth plan, if the NAV appreciates to Rs 60, the worth of these 2 units would be Rs 120. So while the number of units remains the same, the worth of your investment has gone up. You can benefit from this plan by selling your investment.

There is another variant for this plan called as Dividend Reinvestment plan. Here the dividends declared are re-invested into the same fund. In this case the number of units you hold will increase, but effectively it is same as growth.

If you are saving for some future long term goal like retirement planning, childrens marriage etc, then this plan is useful.