Thursday, 23 August 2012

Invest in Safe Stocks to Earn More

Invest in safe stocksInvestment is a process of spending money for getting more by way of growth or income. An investor really wants to earn more with low amount of investment which means a high rate of return. But when the expected rate of return is high, the risk of losing money is also high. If you just keep all your money in your house under lock and key, it also has some risk. Here the question is how much risk one can bear. In case of stock investing a high level of risk is there. The volatility in stock market is very high. You can make a lot of money and at the same time you can lose a lot. But if you are careful in stock investing, you can cut the risk of losing money and can increase return. Invest in safe stocks, reduce your risk and increase your earnings.

Catch fish when the water is troubled

This does not mean to make trouble the water to fish out. I just say when the water is troubled, catch enough fish. There is a tendency to sell shares in a hurry when the market is in dip. But that is not good. You should buy them when the market is going down and sell your equities when the market is up. This does not mean that buy any shares when the market is down. Buy only safe shares, shares of strong companies, when they are undervalued. Sometimes the shares may go down under the realvalue of shares. Calculate the normal value and buy when it is going down and sell when it is overvalued. If you could find out the real value of shares you can win in stock market.

What are safe stocks?

Is there such a stock which is labeled as safe? Most investors think that all stocks are risky and volatile. But there are safe stocks also. The success is to know how to find a safe stock. How to differentiate the safe ones and risky ones? Unfortunately there is not a clear definition and method to find a stock is safe or risky. But when you buy shares select it from top index shares of Nifty 50, Sensex 30 or such high indexed shares which may not give you a loss. But keep in mind that invest only when the shares are undervalued and sell them when it is overvalued. You will get a definite profit.

An investor who can find the discounted price and MRP of a group of shares could win the game. Select a group of strong shares such as nifty 50 or sensex 30 etc. Find out the MRP and Discounted price of these shares and add them to your market watch. When the price came near discounted price of any of these shares buy them and sell them when it reach near the MRP. That’s all to bring you to the way of victory.

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