Earn Money From Stock Market

Earn Money From Stock Market – “We should not be smarter than others; We have to be more disciplined than others.” – Warren Buffett

From my previous blog it is very clear to everyone why there is a stock market. And we have to learn that everything is in business, and sometimes business fails. Therefore, the stock market becomes risky. Another common question for those who are new to the Indian stock market or those who want to join this market is HOW DO PEOPLE MAKE MONEY IN THE STOCK MARKET?

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For many of you, this question would be a real miracle, because everyone wants to learn how to make money. Let’s get started!

Why Do People Lose Money In The Stock Market

I hope some of you have already tried the market and you are here with high hopes to learn about it. Now let’s look at things from a layman’s point of view. Here’s how people think someone makes money in the stock market

It’s like buying a stock at a low price and selling it at a higher price, making a big profit. Also, many people make the false assumption that day trading can make a lot of money. Don’t you think?? tell me what you think about it.

As stated in a previous comment, businesses can succeed and fail. When I say that the business is successful, it can be successful in any case, we have no idea. For example: A company that starts with just one lakh rupees can eventually become a thousand or ten thousand billion company.

How can this happen? This happens because there was a huge market where they fed people. There was so much demand for their products and services that they had so many customers. · They grew very fast, so those who invested made huge money.

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I would like to take a moment to remind you that I had a great time at the stock market. I have literally seen the smart money move. When I tell you it’s smart money, it’s not ordinary people’s money. It is about big money of big players like FII and DII exactly how they make money here in the market. I have seen success stories from some people and some success from myself. And I feel that as a teacher, not a coach, I have a moral responsibility to tell the whole truth that I believe the power of compounding helps you make money in the stock market.

FII – Foreign Institutional Investors (Foreign institutions investing in Indian markets are FIIs) For example: Morgan Stanley, Canada Pension Fund etc.

DIIs – Domestic Institutional Investors (Institutions investing in Indian markets are DIIs) eg: LIC, HDFC Mutual Fund, etc.

Let’s start deep learning with a better example. We all know that FD gives us 6% interest per annum and if you invest in FD for long time it will be huge money after 10-20 years. But what if I told you that the same money can grow by 40% per year.

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The first thing that comes to your mind is that it is impossible! Where money grows by 40% per year, no way! Now, using Google’s compound interest calculator, I’d like everyone to check the answer to the question below. Write in the box that you are investing one million rupees for 10 years at 40% interest. So, what amount does this sum represent in the bottom line? Don’t be surprised! One of his polishes has now been converted to 28,000. This is the magic of tuning.

The more often your money earns interest, the faster and bigger your balance will grow. When interest is added to your account, it calculates interest on the original balance plus previously earned interest. The final cash back is called the annual percentage rate (APY).

The next thing that comes to mind is where can we find companies growing at 40%? Before proceeding, please pay attention to this page “screener.in” which we will use extensively throughout the course. On this page you can find company comparisons, quarterly results, income statements, balance sheets and indicators.

I’ll share an example again. Look for Bajaj Finance on the screen. You will get the full score. Let me show you an overview of this company’s website sales growth. Sales do not include excise duty or discount.

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As you can see, the increase in sales is 40% and the increase in profit is 60%. The business has grown by 40% in the last 10 years, and increased growth means it is growing by 40% per year.

Now look what happened in the last 10 years, a company with a share price of Rs 33 rose from Rs 2000 to Rs 4500, an average of 130% in 10 years. Can you believe it? Let’s face it, if you invested a million in this company 10 years ago, now you will have 1.3 million. Wow! Sounds good.

Well, we calculated earlier that if you grow by 40%, you will get 28 million forints per million rupees invested. But the graph shows that similar growth resulted in 130 times more money.

Generally, stock brokers and tipsters in the market perceive that you are constantly buying and selling and that you can make money. People fear that less money cannot be invested in long-term or worthwhile investments.

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Take the example of Bajaj Finance, Rs 10,000 invested in Bajaj Finance for about 10 years would be 13 lakhs today. As a teacher, I would recommend beginners or those who already participate in the stock market not to do day trading, because many people lose. We will cover this in detail in the next blog. Stay tuned….

Now we know that companies make a profit, and if they want to grow together, they have to expand. To do this, they reinvest their profits.

Companies that are going through a growth phase continue to reinvest their profits to take their business to the next level. During this period, they are unlikely to distribute profits to their shareholders.

In this case, the company grows faster, and as a result, the share price rises, which in turn increases its invested capital. A dividend is something that is distributed to all shareholders from the company’s profits.

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Now let’s look at another scenario. Let’s say the company has grown enough and is making huge profits. Then they can’t find a way to reinvest that profit back into their company. So they distribute it equally to their shareholders.

Now consider that the company made a profit of 100 million. That they want to reinvest 50 kroner, leave 30 million on the balance sheet, and distribute 20 million to their shareholders.

The distribution of profits depends entirely on the stage of business activity. There are many companies that have paid excellent dividends, but their growth potential is limited.

In some cases, companies reinvest all their profits into their growth. In some countries, only part of the profit is reinvested, and the rest goes to investors. In other cases, all profits are distributed to investors.

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As a result, some people approach investing only in reputable companies. You can see my quora profile ‘KUNDAN KISHORE’ where I answered a question regarding companies that offered good dividend last year.

Well, this is called fundamental analysis. I have explained this in detail in the case studies of my course “Indian Stock Market”.

Lots of information about the Indian economy as any business has to be in line with the economy and performance of the sector.

Most of us already work in one sector or another and know exactly what is happening in that sector. Similarly, we should try to explore other sectors.

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Don’t lose hope; By applying these concepts of qualitative and quantitative analysis, it is not that difficult to find good companies. It’s actually easy to learn. I would say that anyone without prior knowledge can learn and identify good stocks on their own.

If you are a trader or someone who wants to make a career out of trading alone, I would say 95% of money moves through fundamental analysis. This is a common theme that favors this trade in the retail segment. . I’m not saying you can’t make money trading. Many have already succeeded.

I just recommend that if you are already doing something and don’t have enough time, don’t trade.

Invest actively or passively and wait for your investment to really grow

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