One of the things that you can do in life to get rich is by investing in the share market. No matter what country you’re in, you can always start your investment and buy your stocks- ultimately leading to a more diverse stock portfolio.
Although it is tempting to think that there is a successful strategy that you can employ for some guaranteed riches, that is actually not the case. There is no “one size fits all” approach in the stock market. If you want guaranteed success, you will need to do a lot of work, analysis, and do all of it with a little bit of luck as well.
That being said, what is the right way to help you identify good stocks for share trading in India? Read ahead to find out.
1.Analyze a Company’s Fundamentals
When you a buy a stock, you legally own a portion of the company. Now, the money that you will receive from them will entirely depend on how they’re doing on their end, that will decide the company to be the best brokerage firm.
For instance, if the company you’ve bought stocks from are doing well and they’re actually booming, you will experience a better ROI.
On the other hand, if your company is suffering because of poor internal management, the staff overlays, and a possible turnover, you could experience a huge loss in net profits as your stocks are going to be undervalued (or in some extreme cases, your stock will have no value at all).
Before buying some stocks, make sure to do your own research and see if a particular company is doing good.
2.Do Qualitative Research
The success of the company will ultimately lie on the hands of the people who are running it. Therefore, it is best that you research about a particular company’s internal structure. Who is running the business? Who is the CEO? What is their internal structure?
You can also ask their management strategies as well. Most successful companies are very transparent when it comes to in-house management because they know that stock traders are investing their hard-earned money in their company.
Doing some qualitative research will help you gauge if a particular company is going to be a good investment in the long run.
3.Look at the Competition
The stock market is full of investors and traders and it is actually a market in the sense that a particular stock’s price can rise or fall depending on the supply and demand. Typically, if the stock is highly-valued, there are more buyers than sellers. The reverse of that can be said for under-valued stocks as there will be more sellers than buyers.
With that being said, it is in your best interest to look at your competition. Look at multiple companies in a certain industry in-depth so that it will help you ultimately decide on which organization you’re going to choose in the end.
4.What is the Brand?
The brand of a company is also very important. Well-established brands might not give you the best profits, but because of their stable nature, you’re going to be earning steady money for the years’ to come.
Conversely, if a brand has, for example, only one endorser and is still relatively new, you’re better of steering clear as there is a big chance that the company will crash and burn.