In India , Earning a fix income other than regular job or business is quite simple if you make decision to invest in nationalised banks or post office or governement bonds or Public providend fund ( PPF)
or National saving certificates .The income if almost fixed & its between 6.0 to 10 % per annum maximum ,if you chose above options wisely.The returns are guranteed because they are secured by government .But there are other ways also like investing in stock markets where one can earn unlimited money if everything goes correct.
There is risk involved in investing stock markets but rewards are higher than expected .Butthe fact remains the same that what about gurantee? There is no gurantee given by comapny or stock market officials or by government for your money. The stock you have selected for investment should be properly studied by yourself & any investment made in the stock always should be checked by yuorself.Though one can get detailed analysis on different stocks by different experts hence anyone can get any information about the company which is selected .
The investments might be short term, medium term or long term but always keep watching profile of the company .One should always be in touch with fundamentals of company.The company owns three risks with them always.There are financial , business , industrial & management risks.Also one more risk factor can be added as Exchange rate risk.These facts are to be considered while investing.
Before investing , you should be clear which shares you want to purchase? The basic parameters are EPS ie Earning per share & PE ratio ie price earning ratio.The EPS is found by dividing the profit after tax by the outstanding number of shares in the market.Do not just rely on recommandations from brokers,friends or any other sources but ensure you do your own study.
One more thing to be remembered is that ensure how much profit or loss could be affordable to you & stick to it that .Dont buy aggressively in any stock or in perticular sector ,but invest in different stocks & in different sectors as well.Look at the dividends & bonus or rightissues
Just keep an close eye on these announcements.
Once you have selected a pericular stock then please keep watching any announcements or any
major changes happenen.These changes or decisions might change future of stocks hence one lesson to be kept in mind.Sell at every good news & buy at ebery bad news.If stock falls or rise sharply then there might be something cooking in the stock .
So keep Investing ……