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The Indian Stock Market

Oct 1

Posted by admin in Stocks Mutual Funds

The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE.

The 30 stock sensitive index or Sensex was first compiled in 1986. The Sensex is compiled based on the performance of the stocks of 30 financially sound benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the stock market was the liberal financial policies announced by the then financial minister Dr. Man Mohan Singh.

The up-beat mood of the market was suddenly lost with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of Indian stock market diverted huge funds from banks through fraudulent means. He played with 270 million shares of about 90 companies. Millions of small-scale investors became victims to the fraud as the Sensex fell flat shedding 570 points.

To prevent such frauds, the Government formed The Securities and Exchange Board of India, through an Act in 1992. SEBI is the statutory body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio managers investment advisors etc. SEBI oblige several rigid measures to protect the interest of investors. Now with the inception of online trading and daily settlements the chances for a fraud is nil, says top officials of SEBI.

Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005. Many foreign institutional investors (FII) are investing in Indian stock markets on a very large scale. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. Experts now believe the sensex can soar past 14000 mark before 2010.

The unpredictable behavior of the market gave it a tag ? ?a volatile market.? The factors that affected the market in the past were good monsoon, Bharatiya Janatha Party?s rise to power etc. The result of a cricket match between India and Pakistan also affected the movements in Indian stock market. The National Democratic Alliance led by BJP, during 2004 public elections unsuccessfully tried to ride on the market sentiments to power. NDA was voted out of power and the sensex recorded the biggest fall in a day amidst fears that the Congress-Communist coalition would stall economic reforms. Later prime minister Man Mohan Singh?s assurance of ?reforms with a human face? cast off the fears and market reacted sharply to touch the highest ever mark of 8500.

India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment. Once viewed with skepticism, stock market now appeals to middle class Indians also. Many Indians working in foreign countries now divert their savings to stocks. This recent phenomenon is the result of opening up of online trading and diminished interest rates from banks. The stockbrokers based in India are opening offices in different countries mainly to cater the needs of Non Resident Indians. The time factor also works for the NRIs. They can buy or sell stock online after returning from their work places.

The recent incidents that led to growing interest among Indian middle class are the initial public offers announced by Tata Consultancy Services, Maruti Udyog Limited, ONGC and big names like that. Good monsoons always raise the market sentiments. A good monsoon means improved agricultural produce and more spending capacity among rural folk.

The bullish run of the stock market can be associated with a steady growth of around 6% in GDP, the growth of Indian companies to MNCs, large potential of growth in the fields of telecommunication, mass media, education, tourism and IT sectors backed by economic reforms ensure that Indian stock market continues its bull run.

Read more about the booming Indian stock market or perhaps about something a little more sad like the stock market crash of 1929

Writen By : William Berg

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Learn To Lose – The Key To Big Wins On The Stock Market

Sep 30

Posted by admin in Investing, Stocks Mutual Funds

In life, you have to learn to walk before you can run. In the stock market, you have to learn to lose before you can truly win.

Sure, your first trade may be a winner, but to consistently make money in the stock market you have to learn how to lose. More to the point, you have to learn how to cut your losses.

The majority of people who dabble in the stock market see themselves as smart, educated and sharp. Self-belief is great. The most successful people in the world have a strong belief in themselves. Some of the most unsuccessful people in the world also have a strong belief in themselves. So what\’s the difference between the successful and the unsuccessful?

One major difference between successful traders and unsuccessful traders is the ability to admit when one is wrong. A successful trader will cut their losses before they get out of hand. An unsuccessful trader will let their losses grow in the false belief (hope) that things will pick up.

It would be nice if every stock pick was a winner, but when you get the odd loser you better make sure you cut that baby lose before you lose some big dollars.

The Stop-Loss

Before you even consider entering a trade, you should determine your stop-loss point. Your stop-loss point should be set at a price that you\’re willing to sell your stock at should things turn bad. The price you pick will vary depending on your financial position and the particular stock being considered.

You may want to set a stop-loss exactly 8% under your purchase price, or you may want to set it just below some clear resistance in a chart (if the stock falls below the resistance level, you can be fairly sure things will continue South for a while). The most important thing is to test your system. If you set your stop-loss too close, you\’ll never be in the game when the stock turns good. If you set your stop-loss too far away, you\’ll end up losing too much money.

Remember, the main aim is to make a profit across your entire portfolio. Imagine you owned $1000 worth of 5 different stock. You set a stop loss at 10% current market value; so if the value of a single stock drops to $900 you\’ll sell at that price. Even if you are wrong with 3 of the 5 picks (a $300 loss), you only need to make 15% on the remaining 2 stocks to break even. What if those remaining 2 stocks made 50% (which is very realistic if you pick your entry right).. You\’d actually profit $700 across your entire portfolio despite the fact 60% of what you picked were duds! :)

Starting with 5 positions worth $1000 each: $5000
3 losing stocks lose 10% each: -$300
2 winning stocks make 50% each: $1000
Total = $5700

Modern trading systems have completely automated stop-loss systems. This makes it so easy to set stop-losses that you have no excuses for losing big in a single trade anymore! In fact, you\’re mad if you don\’t take advantage of stop-losses. The only trick is setting them wisely. You\’ll learn how to plan and time your entry and exit points on this site over the next few months.

Until then, good luck and keep on learning..

Learn how to win on the stock market by following the Australian Stock Market Technical Analysis web site.

Writen By : Scott Geer

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Using Stock Research And Stock Analysis Services

Sep 29

Posted by admin in Investing, Stocks Mutual Funds

I consider my community a stock market research and education service that is offered to anyone interested in learning how to invest in the market for themselves. I do not manage money and I do not make specific stock picks for anyone in my community. I like to believe that this service is different from most of the stock market services offered on the internet because I aim to teach you how to invest in the market so you do not have to depend on my research for the rest of you trading life. I teach a method, a philosophy that I have developed so you can build a foundation for success; but you the investor must personalize your own system and perform your own due diligence and test what works for you and your trading characteristics and emotions.

It is easy to lead an individual to water but I can?t force this same individual to drink the water if they are thirsty. The same logic holds true for the stock market because I can show you how to invest successfully but you and ONLY YOU can make the proper decisions to show a profit at the end of the year.

I always wonder how many of my members take the opportunity to make money from our MSW Index stocks. This past weekend (12/3/05), I asked them to look in the mirror and be honest about their results over the past year (and their decisions since the rally was confirmed weekly on MSW on 10/22/05). Since we confirmed the rally on October 22, 2005 (on the weekly screen) our MSW Index stocks have been up over 17% as a group (this groups contains 18 stocks that were listed on the weekly screen on 10/22/05 ? very impressive results for so many stocks).

The Index has provided us with many buying opportunities at moving average support, consolidations and pivot point breakouts. Since the last weekly screen (November 19, 2005), the MSW Index has advanced by 6.25% with only two stocks falling for a loss (CRDN and FORD). Forward Industries was the largest loser, falling 6.13%. Our best gainer over the past couple of weeks was LMS which was up 23.25% on big time volume. Of the 26 stocks on the MSW Index, eight of them were up more than 10% while another three stocks were up at least 5% or more. Things move so fast in the market, it is tough to sit back and realize how successful our MSW Index stocks have performed in 2005 versus the rest of the market. A new page will be added as the year closes that will update the performance of the MSW Index versus the major market indices (NASDAQ, DOW, S

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Life Is A Hard Teacher: Failing To Have An Exit Strategy

Sep 29

Posted by admin in Stocks Mutual Funds

I can tell you a specific thing I learned early on when I started buying stocks. I had $550 in my account… not much I know… so I bought 1 stock, 100 shares at $1.90 a share. Just 3 hours later it dipped to $1.80 a share… so I bought another 100 shares. The next day I bought another company at $2.15 a share, 50 shares. Later that day I bought a OTC stock for .04 a share/100 shares.

By the time I did these few transactions I had 400 shares of stock, but guess what? I had $5.76 in trading cash left. So what happened was my first stock tanked down to $1.60 a share and I couldn\’t get out because I didn\’t have enough cash to put a stop limit on it nor outright sell at a small loss. My second stock went up to $2.75 a share and I couldn\’t sell for a profit because I couldn\’t afford the trading commission.

Moral of the story as specifically related to the stock market:

1) Don\’t buy more of a stock going down… you\’re throwing money into what is likely a sinking ship.

2) Never buy so much stock that you can\’t afford trade commisssions.

I took that knowledge and became a slightly better stock trader with it.

Moral of the story as an overall lesson about financial planning:

1) Always know what your costs are going to be.

2) Always leave the exit available, open and know when you want to get out.

3) Follow your strategy!

Rasheed Ali (#1 Adversity Consultant) and Bill White (Syncronicity Expert) have just launched http://www.SleepYourWayToRiches.com — a powerful new success and wealth creation website and http://www.SolutionCoach.com –
a powerful business and success coaching site.

Writen By : Bill White

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A Simple Start To Stocks

Sep 28

Posted by admin in Stocks Mutual Funds

Information about the stock market and stocks are everywhere. Unfortunately, it isn?t really easy for the average person to understand. It is best to have a professional handle your stocks if you are going to seriously get involved in buying, trading and selling, but it is also important that you have some basic knowledge of your own.

Stocks are pieces of a companies net worth that you buy. When the companies net worth grows so does the price and worth of your stock and visa versa when the companies net worth decreases. Companies usually sell stocks to gain capital (money). It is a easy, risk free way for them to raise money. When you own stock in a company you own a piece of that company.

Buying stock can be difficult. That is why most people go through a stock broker. There are a few different kind of brokers and their names can give you idea of how much they will charge you : full service brokers, discount brokers, and deep-discount brokers. Some brokers will look at past performance to decide if it is worth buying a companies stock. Other brokers will look at how the company has grown over a period of time. The Securities and Exchange Commission (SEC) makes the rules and governs over the stock market.

Here are three simple tips to help you make the most out of your stock market experience.
– Keep stocks that are making money.
– Dump stocks that are losing money.
– Look for companies with good CEO?s.

Once you decide on your broker and what stock you are going to buy, keep up=to-date on how your stock is doing by watching stock returns on TV or reading them in the paper. Keep alert about your investment and you should do all right.

The Stock Market article was written by Craig Dawber, The infomation found in this website can without doubt can help with starting in the stock market check it out http://stockmarketpages.info.

Writen By : Craig Dawber

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The Capital Asset Pricing Model Of Stock Investing (CAPM)

Sep 28

Posted by admin in Stocks Mutual Funds

In 1990 Harry Markowitz, Merton Miller, and William Sharpe shared the first Nobel Prize in the very young area of financial economics. The Nobel committee recognized Harry Markowitz for developing portofolio theory, Miller for the theory of corporate finance, and Sharpe for the Capital Asset (stock market) Pricing Model also known as CAPM.

CAPM was the crowning acheivment of theoretical economists bent on proving that markets are efficient and work together mathematically with the precision and elegance of a Rolex watch. In the 1980s, researching financial economists began to notice a slew of empirical results that are not consistent with the view that stock market returns were determined in accordance with CAPM and stock market efficiency.

It is useful for you to understand what CAPM is because you will read or hear about it as you progress as a stock market investor. CAPM is a regression model designed to separate out the general stock market price changes from price changes specific to a given stock. The general stock market price change is called unsystematic risk. An investor can get the same return as the general stock market buying a mutual fund that is indexed to the stock market such as the Vanguard 500 fund (symbol VFINX). For this reason the amount of profit you receive on a specific stock that is as much as the stock market indexes is said to not be priced into the stock in terms of the risk you are taking.

The amount you make or lose on a given stock as compared to the stock market averages is considered to be priced by investors to compensate for the additional risk you take in buying stock in a single company instead of a fund indexed to the stock market. The profit or loss that you receive as compared to the stock market is called systematic risk. The capital asset pricing model measures systematic risk with a regression coefficient called beta. When I talk about beta now you know what it is; it is nothing more than a measure of additional potential return an investor should receive for purchasing a single stock based on how risky that stock is. I want to emphasize that CAPM is based on the notion that the stock market efficiently translates all information known about the stock market into stock prices for stock investing purposes.

Dr. Brown can teach you how to invest through The Delano Max Wealth Institute (http://www.DelanoMax.com). He is dedicated to providing you with courses and seminars that teach prudent savings and investing habits. Dr. Brown is also a finance professor at the University of Puerto Rico at Rio Piedras. He is also recognized as an expert at low risk, high return investing and takes great pride in helping others retire safely.

Writen By : Dr. Scott Brown, Ph.D.

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The Three Factor Model Of The Stock Market: The Fama-French Three Factor Model

Sep 28

Posted by admin in Stocks Mutual Funds

Proponents of market efficiency divide risk into unsystematic and systematic. Unsystematic risk is not priced by everyone investing in the stock market. Here is an example to help you understand unsystematic risk. If you are considering investing in the stock market you could either buy specific stock in a specific company that you think will have a rise in price in the future. On the other hand if you don?t trust your stock ability you have the alternative of buying a basket of stocks that mimics the stock markets total combined movement. One way would to be to buy an indexed mutual fund like VFINX which is pegged to the S

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