Which Factors should investors need to consider for investing in the stock market?


The investors should avoid dependency on margin/ loan to minimize the risk level of stock market. Those who invested in stock by margin/ loan facing more lose during December, 2012 to January, 2012.

Investor should invest on the basis of industry profile of a company, Net Asset Value (NAV), earnings per share (EPS), previous history of dividends, the people engaged in the management, the asset revaluation, the credit rating status, sector performance and policy risks. He also suggests three strategies for making investment in different sectors including the stock market. These are the amount of forecasted profits before investment, the dept of risk in any sector and how easily the invested amount can be converted into cash. If the above three conditions are favorable for an investor then he will go for investment otherwise not.

 A section of unscrupulous people takes benefits creating rumors dragging different issues that affect the market. The investor should invest on the basis of his/her own assessment, not on the basis of rumors.

 The prices of good fundamental shares have not increased like the value of the companies share with poor fundamentals. The investors are not conscious about their investment after a destructive market debacle. It has been stressed on having a transparent idea about the securities rules for the sake of their own safeguard. No one can manipulate the market if the investors have idea about the existing rules regarding IPO (Initial Public Offering), price fixing, rights share and its premium, and the rules regarding price sensitive information. Investor’s proper knowledge on securities rules can bring the manipulators under the scanner of even if they go to court. It is also to be suggested that not to comment that affects the stock market either positively or negatively.