In continuation of our series about important financial ratios that everyone should know about, here are a few more that will help you become a better investor. EV/EBITDA People often use the P/E ratio and the enterprise value (EV) by EBITDA to figure out how much a company is worth. Market capitalization plus debt less cash equals EV. It gives a much more accurate takeover valuation because it takes into account debt. This is its main advantage over the price-to-earnings ratio, which can be thrown off by very high earnings that come from debt, as we've seen. EBITDA stands for earnings before taking into account interest, taxes, depreciation, and amortisation. This ratio shows how much a business with a lot of debt is worth. As EV/EBITDA is not affected by the capital structure, it can be used to evaluate businesses with different amounts of debt. A lower ratio shows that a company is undervalued. It is important to note that the ratio is high for industries with fast growth and low for industries with slow growth. RATIO OF PRICE TO EARNINGS GROWTH The PEG ratio is used to figure out how the price of a stock, its earnings per share (EPS), and the growth of the company are all linked. A high P/E ratio is often a sign of a business that is growing quickly. This could mean that something is worth too much. The P/E ratio is divided by the expected growth rate to see if a high P/E ratio makes sense given the expected growth rate in the future. The end result can be compared to that of peers who grew at different rates. A PEG ratio of 1 means that the price of the stock is fair. If the number is less than 1, it could mean that the stock is undervalued. RETURN ON EQUITY The main goal of any investment is to make money. Return on equity, or ROE, is a way to measure how much money shareholders get back from the company's operations and profits as a whole. Investors can use it to figure out how profitable businesses in the same industry are. Having a number is always better. The ratio shows how good the management is. ROE is the ratio of net income to shareholder equity. Even though businesses with a lot of growth should have a higher ROE, a ROE of 15-20% is still good. The biggest benefit is when earnings are put back into the business to make a higher ROE, which leads to a faster growth rate. But it's important to keep in mind that a rise in debt will also lead to a rise in ROE. INTEREST COVERAGE RATE It is found by dividing interest costs by EBIT, which stands for earnings before interest and taxes. It tells how healthy a company's finances are and how many interest payments it can make through its activities alone. When comparing businesses in different industries with very different depreciation and amortisation costs, EBITDA can be used instead of EBIT. Or, if you want a more accurate picture of a company's ability to pay its bills, you could look at its earnings before interest but after taxes. CURRENT RATIO This shows the liquidity situation of the company, or how ready it is to pay its short-term debts with its short-term assets. If the number is higher, it means that working capital problems won't affect how the company runs. Red flags go up when the current ratio is less than one. The ratio can be found by dividing the current liabilities by the current assets. Receivables and stock are examples of what are called "current assets." Businesses can find it hard to turn receivables into cash and inventory into sales. This could make it harder for it to meet its obligations. In this case, the investor may look at the acid-test ratio, which is similar to the current ratio but doesn't include inventory and receivables. ASSET TURNOVER RATIO It shows how well the management makes use of resources to make money. The better the ratio, the more money the business makes for every rupee it spends on an asset. The ratio is better if it is higher. Experts say that the comparison should be made between businesses that work in the same industry. This is because the ratio could be different in different industries. Asset-heavy industries like telecommunications and power have a low asset turnover ratio, while retail has a high one (as the asset base is small). DIVIDEND YIELD Dividends per share are based on how much each share is worth. If the number is high, that means the business is doing well. But penny stocks, which are low-quality but have high dividend yields, and businesses that sometimes make a profit or have extra cash they can use to pay special dividends should be avoided. In a similar way, a low dividend yield may not always mean that an investment is a bad one. For example, businesses (especially those just starting out or growing) may decide to reinvest all of their profits in order to give their shareholders good long-term returns. Financial ratio research helps evaluate things like profitability, effectiveness, and risk. Before investing in a stock, you should also look into the macroeconomic environment, the quality of the management, and the outlook for the industry.
Aug 25, 2022
Before investing in a company's stock, the financial parameters must be carefully looked at to find out what its real value is. Before you buy shares, you should think about the eleven financial ratios we give you. Before investing in a company's stock, the financial facts must be carefully looked at to find out what its real value is. This is usually done by looking at the balance sheet, cash flow statement, and profit and loss account of the company. This can be hard and take a long time. It's easier to learn about a company's performance by looking at its financial ratios, most of which can be found online for free. This is a good way to quickly figure out how healthy a company is, but it is not a foolproof method. You should think about these eleven financial ratios before you buy a stock. P/E Ratio The price-to-earnings ratio, or P/E, shows how much investors are willing to pay for each rupee of earnings. It shows whether the market is putting too much or too little value on the company. The best P/E ratio can be found by comparing the current P/E to the past P/E of the company, the average P/E of the industry, and the P/E of the market. A company with a P/E of 15 may seem expensive when compared to its historical P/E, but if the industry P/E is 18 and the market average is 20, it may be a good investment. If the P/E ratio is high, the price of the stock may be high. A stock with a low price-to-earnings ratio may have more room to go up. P/E ratios should be used along with other financial ratios to help people make good decisions. PRICE-TO-BOOK Ratio The price-to-book value (P/BV) ratio compares the market price and book value of a company. Book value is simply the amount left over after a company sells all of its assets and pays off all of its debts. The P/BV ratio is used to figure out the value of a company's shares if it has a lot of real assets on its balance sheet. If the P/BV ratio is less than 1, the stock is undervalued because the value of the company's assets is higher than what the market is putting on the stock. It shows what a company is really worth and helps figure out the value of businesses with mostly liquid assets, like banks and financial institutions. DEBT TO EQUITY Ratio It shows how leveraged a company is, or how much debt it has compared to the amount of money its founders put into the business (equity). Most of the time, a low number is better. But it can't be looked at by itself. The debt will be worth more if the company makes more money than it spends on interest. But if it isn't, shareholders will lose. A business with a low debt-to-equity ratio may be expected to have a lot of room to grow because it has more ways to get money. But it's not that simple. It varies by industry, with higher numbers in industries that need a lot of capital, like manufacturing and the car business. A high debt-to-equity ratio could be a sign to the market that the company has invested in a lot of high-NPV projects, but it could also mean that the company has a lot of debt and, therefore, a higher risk of credit default. A stock may be overpriced if its P/E ratio is high. A stock with a low price-to-earnings ratio may have more room to go up. P/E ratios should be used along with other financial factors to help make good decisions. OPERATING PROFIT MARGIN (OPM) The OPM is good at setting prices and running its business well. It is found by dividing the operational profit by the net sales. A higher OPM shows that it is efficient to get raw materials and turn them into finished goods. It figures out how much money is left over after paying for variable costs like salaries and raw materials. The margin is bigger the better it is for investors. When analysing a company, check to see if its OPM has been going up over time. Investors should compare the OPMs of different companies in the same business sector.
Aug 24, 2022
Multibaggers describe equity shares of a company that could give returns that were many times greater than the cost of buying them. The correct answer is that these stocks give investors a return of more than 100%. There are many multibagger stocks that are great investments from companies with high growth. Due to their strong fundamentals, multibagger shares usually trade at a discount, which makes them great investments. These businesses have great ways of making things and good ways of running them. Such shares might be in high demand on the market because they show that a company is good at research and development. Companies that own these kinds of shares can grow quickly. How can you find a multibagger? Before you invest in a company, think about the following to find shares that will make you money. The amount of debt that the company in question takes on must be reasonable. Different industries have different ideas of what is reasonable, but in general, debt shouldn't be more than 30% of the value of equity. It's important to look at how the company has done in the past because that can show if its revenue is likely to grow slowly or not. The operations of a company may be easy to scale up, which could make its shares go up in value by a lot. It can be helpful to know how much money the business makes and where that money comes from. A company's operations may also be affected by whether or not its management, business model, or organisational structure has changed in a big way. How important multibaggers are The Best Multibagger Due to the huge returns they offer, stocks are known for helping people make a lot of money. But you have to buy a lot of these shares if you want to invest in them and make money. This means that if they lose money, it could have a very bad effect on the world. These stocks could also get caught in an economic bubble for a short time. But when the bubble pops, investors could lose a lot of money. Multibagger stocks may not be the best choice for people who are new to trading stocks and don't have much extra money. They might be better off putting their money into mutual funds. Alternatives to multibaggers Mutual funds offer their clients a diverse portfolio of stocks, bonds, or other securities. These portfolios are managed by experts and don't cost much for investors. There are different kinds of mutual funds that take into account different things, like the kinds of assets they invest in, their goals, and the returns they want. A big chunk of the money in employer-sponsored retirement plans comes from mutual funds. It's important to remember that investors in mutual funds pay annual fees, which are sometimes called "expense ratios." These things could change the total returns. In conclusion People find it easier to invest in the stock market now that they can buy and sell mutual funds online. Before making an online investment in a mutual fund, investors must do a lot of research. The Internet can be a good place to find information about mutual funds that you can invest in right away.
Aug 23, 2022
When it comes to financial ratios, there is no such thing as the best measure. Each ratio has its own advantages and disadvantages. Two of the most common ratios are the Return on Equity (ROE) and the Return on Capital Employed (ROCE). The first is valuable from the point of view of equity shareholders, while the second is important from the point of view of how a company uses its capital. First, let's explain the difference between ROE and ROCE. When comparing return on capital to return on capital employed as a way to judge a company, which is the better statistic? ROE or ROCE? Which is better? First, let's look more closely at how ROE and ROCE are used. ROE Return on equity is one of the most popular ways to figure out how much money shareholders made (ROE). When you put money into an investment, you want to know how much money it is making. Shareholders get dividends out of the company's profits as they come in. After paying dividends, any money left over is added to the business's net worth. ROE is important because it shows investors that the money that is being put back into the business is still making a good return. The business can do one of two things with the money it makes. First of all, by giving dividends to shareholders, it reduces the company's wealth. The second plan is to put the money back into the business for internal use. If a company decides to reinvest profits instead of giving them out as dividends, it must show a strong return on equity (ROE) to support this decision. ROE is very vulnerable because the business needs capital and depends on capital assets. For example, telecommunications and oil, which require a lot of capital, tend to have low ROEs. On the other hand, information technology and fast-moving consumer goods have a better return on equity and need less capital. ROE and P/E ratios, which are used to value stocks, usually go together well. Most of the time, sectors with higher ROEs have higher P/E ratios. To put it another way, most FMCG companies in India are worth more than mining, metals, telecom, and oil extraction companies because they have more assets. Companies with a high return on equity usually have few assets and little debt. ROE is calculated by dividing net income by net worth (Equity) The company's net worth is made up of its base equity capital and its free reserves, which were made with money from the company's profits. ROE not only measures how much value the company leaves for its shareholders, but it also measures how well the organisation uses the profits that are put back into the business. ROCE Before you can understand what ROCE is, you have to know what ROE is not. ROE only looks at returns from the point of view of equity shareholders. But there are also other people who have a stake in the company, such as lenders, bond and debenture holders, etc. We need to know how much money the company makes for its owners. You could say that these people have something to gain. That's great, but how do I decide if I want to buy the debt of a company or not? This is done by looking at the business's ROCE. The ROCE ratio shows how much a company makes from its operations compared to how much capital it uses. What is operational profits? It shows how much money was made after depreciation but before interest and taxes. Even if you say that depreciation is not a cost, the tax shelter from depreciation will be used to make up for it. In that way, it is a cost of doing business. When we talk about capital used, both long-term debt and equity are included. There are two ways to look at the use of capital. First, equity, free reserves, and long-term loans can all be thought of as long-term sources of funding. Another option is to look at the total assets that are not covered by current liabilities (total assets – current liabilities). The following can be used to model ROCE: EBIT + ROCE = Earnings Before Interest and Taxes + Return on Capital Employed (Total Assets - Current Liabilities) The numerator is the company's operating profits, and the denominator is its long-term capital in the form of equity and debt. In light of the ROE, how should the ROCE be understood? Let's look at a really interesting case. Which measure of return, ROE or ROCE, is better? The main point is that from the point of view of shareholders and figuring out where the P/E Ratio is going, ROE is more important. But when you look at the company as a whole, ROCE is better.
Aug 22, 2022
The letters "EBITA" are important in the financial world today. Before investing in a company, investors look at its EBITA to see how effective it is, how much money it makes now, and how much it could make in the future. Because of this, knowing what EBITA means is very important when making predictions about a company. What Does "EBITA" Stand for? Investors often use the term "Earnings before interest, taxes, and amortisation," which is written as "EBITA." You should know how investors use the term "EBITA" so that you can give a better explanation for the important parameter. EBITA is useful for investors because it lets them compare different companies. Also, these comparisons are made between companies that work in the same industry. When investors want to figure out how well a company has done over time, they can use EBITA to get an accurate picture of how it makes money (and profit-making ability). What function does EBITA serve? When investors want to put money into a company by buying its stocks or shares, they look at its EBITA. This is the company's net income before income, taxes, and amortisation are taken out. EBITA shows a company's true profit without taking into account the cost of financing. So, it gives stockholders an accurate picture of how much money a company makes and how well it runs. So, based on these factors, it tells investors whether or not they should buy the stock. This shows why EBITA is important on the stock market and answers the question "What is EBITA on the stock market?" As EBITA suggests, you can learn about a company's creditworthiness which can be found in major websites like NSE India. Before you put money into online trading, you should figure out your EBITA. In the stock market, what is an EBITA? Several things are taken into account when figuring out a company's net profit. These include investment income and expenses, loan interest, taxes, depreciation, etc. But they don't show directly how successful a company is. People who buy a lot of shares in a company can use the EBITA metric to decide whether or not to invest if the company consistently does well. This means that the share price may go up because the company's future looks good.
Aug 20, 2022
Indians have always liked gold a lot, and this has been true for a long time. India didn't get its first gold exchange-traded fund until 2007, though (Gold BeES). Gold is the asset that these ETFs are based on. Gold ETFs also give you a way to invest in the gold market in India. And this Diwali, when it is considered auspicious to invest especially in gold, you can buy its ETF on the share market with your Zebu trading account. Exchange-traded funds (ETFs) for gold, also called gold ETFs, are open-ended mutual fund plans based on the price of gold, which changes all the time. There are a lot of costs involved in making real gold. Gold ETFs are a way for investors to get into the gold market. They are a great choice for long-term investors who want to beat inflation. Gold is also a safer investment than stocks because it doesn't change as much. Because of this, it gives you the chance to invest in gold and trade stocks. Some fund companies make money by buying and selling gold bullion. Because of this, they have to keep a close eye on the market. The price of real gold has a straight-line effect on how much gold ETFs are worth. Not only do they not skimp on purity, but they also make sure it is always available everywhere in the country. Who should buy gold exchange-traded funds? Gold ETFs could be a good choice for investors who want to add exposure to the gold market to their portfolios. It's a low-risk investment that careful investors should look into. The money is used to buy standard gold bullion that is 99.5% pure. Gold ETFs are a low-risk investment, even though they are bought and sold on stock exchanges. People can buy gold ETFs instead of real gold if they don't want to pay money to store it or pay extra taxes. What Gold ETFs are and what they offer Flexibility You can buy gold exchange-traded funds (ETFs) online and put them in your Demat account. The asset management company buys and sells them on a stock exchange (AMC). Even in the Demat format, gold ETFs act a lot like real gold. Liquidity Gold ETFs are very liquid because they can be traded on the stock market at the going rate during a trading session. Also, transaction costs, such as broker fees and government taxes, are lower than with real gold. Smaller capital requirement When you go into a shop, you will need a lot of money to buy gold. When you buy and sell gold ETFs, on the other hand, you can choose how much you want to buy and sell. It's easy to take part in the gold market Gold exchange-traded funds give investors access to the open, successful, and safe gold market (ETFs). Also, they have a lot of cash on hand because gold is easy and quick to exchange. Long-term investment Gold ETFs are not subject to a wealth tax like real gold is. Safety and storage are also not issues with a Demat account. Because of this, you can keep your ETFs for as long as you want. Tax-efficiency Gold ETFs are a tax-friendly way to store gold because the profits they make are taxed as long-term capital gains. Still, sales tax, VAT, or a tax on wealth won't make things harder. Trading on a platform (NSE) Investors in gold ETFs can trade in a clear way on the National Stock Exchange (NSE), which is a stock exchange platform. Easy transactions You can use it as security for loans and list it on the stock exchange to buy and sell it. Since there are no costs to enter or leave, transactions go more quickly and smoothly. Risk elements The NAV, or net asset value, of a gold ETF can go up or down with the market, just like any other stock fund. In a similar way, other costs, such as the fee for managing the fund, can also change the results. This Diwali, if you are interested in investing in Gold, open a Zebu trading account and start investing today. It only takes 5 minutes.
Aug 19, 2022
Options for investing this Diwali: There are many ways to invest, from corporate bonds and gold to stocks and index funds, which may help you build wealth and be financially stable in the long run. During Diwali, lights are used to celebrate, and Goddess Lakshmi stands for wealth. During the Samvat year, it is smart to make plans for money and lay the groundwork for financial stability (the Hindu New Year). People can build wealth and plan for their financial future in many ways, from buying gold to buying stocks. The primary market Initial Public Offerings (IPOs) They are great ways to invest for the long term. After a short period of calm, the market for initial public offerings (IPOs) has recently exploded. As the economy and business growth continue to rise, many businesses will use the primary markets to raise money and list their subsidiaries or verticals. Equity Long-term returns from stocks have always been better than short-term changes in the economy and market. They may also do better than other asset groups in the long run. Value investing is a good place to start. Value investors are like stock scouts because they look for cheap companies or stocks that other market participants haven't found yet. Instead of buying stocks, they put their money into businesses. Rakesh Jhunjhunwala and Warren Buffet are two examples of value investors. Investing in stocks with high dividends could also be a good idea, especially when the market is very volatile. Some Indian businesses are known for giving out attractive dividends. Since they are still stocks, high-dividend stocks still have the chance to go up in value. Index funds Now is a good time to start investing with them Around Diwali, and index funds have been known to give better long-term returns. Since the market can go up and down and there is a real risk of losing money, and if you don't know much about the market, you may not want to invest in stocks. Here are index funds. An index fund is a type of mutual fund that looks like the portfolio of an index. For example, a Nifty index fund would track the NSE Nifty index and hold a mix of the 50 stocks that make up the Nifty. The results of an index fund would be similar to those of the index it tracks. So, asset allocation with index funds gives you diversification, lowers risks, and increases long-term returns. Corporate bonds Corporate bonds are a good choice for investors who don't want to take too much risk and want a stable way to make money and good returns in a time when fixed deposit rates are going down. These bonds are made by both private and public businesses. Investors should only choose companies with a good reputation, a long history of paying their bills, and a high credit score. Gold Gold has been one of the best investments this year. It has gained more than 30%. Gold is seen as a safe investment option because it tends to do well when things are uncertain. Gold is likely to keep its shine for a long time, since the Covid19 pandemic shows no signs of stopping and geopolitical problems in India's region and around the world are getting worse. Gold is also a good way to protect against inflation. During the Dhanteras celebration, it is said to be lucky to buy gold. If you would like to open a Zebu trading account and start investing in any of these instruments, please get in touch with us today.
Aug 18, 2022
Muhurat trading is an old ritual that has been done by traders for hundreds of years, even before the existence of the share market. This is the lucky hour of trading that happens on Diwali, and the stock exchange decides when it happens every year. People have thought for a long time that trading or investing during the Muhurat will bring money and success for the whole year. During this session, which is mostly held in the evening, most traders buy stocks. The word "Muhurat" means a good time to do business. According to the Hindu calendar, this is when the planets are lined up in a certain way, making it a good time to do business. Most traders do business during this time of year for sentimental, religious, and customary reasons. How did it all begin? During the Muhurat trading session on Diwali, brokers used to set up new settlement accounts for all of their clients. Indian stock exchanges are the only ones that can do Diwali Muhurat Trading. On Diwali, a ceremony called Laxmi Pooja is held on the stock market, and investors buy shares of reputable companies to keep for future profits. Muhurat trading tells us two things that are clear and loud: pay attention to quality and make investments with long-term goals. Information you need to know about Muhurat Trading 1. The best day to put money away People believe that the day of Diwali and, especially, the season of Muhurat trade are especially good times to invest money. This is one reason why a lot of traders start the day with special prayers and buy shares in companies they want to invest in for the long term. To make a smart investment, you also need to know what happened on the stock market the day before. 2. Good for first-time investors The best time for a new trader to make their first deal is called the "muhurat deal." One can learn about the market while exploring with a small amount of money. Once they understand it well enough, traders can choose the best stocks to invest in. 3. Helps day traders make money Many traders believe that muhurat trading is a good way to make a lot of money because the Sensex will be going up, for sentimental reasons. Because of this, many people buy and sell stocks on the same day. But people should be careful because the Sensex has lost money on some Muhurat trading days. There have also been times when the Sensex went down the day after an event. What do you need to do? Before making an investment, a person who wants to make money should look for stocks or equities with a high return and a strong cash flow. Adding gold to your portfolio of investments needs careful thought if you want to make money from it. Today, you can easily buy Gold in the form of ETF or bonds. Muhurat trading If you're one of the many traders who hasn't yet found the right time to buy or sell on the stock market, this is the year to do it. This is a very exciting time for both traders and investors. But it's important to remember to trade wisely and not let your desire to make more money take over. So get ready by doing research on the stocks you want to trade and the money you want to put in during the Muhurat Trading this Diwali. Open your Zebu trading account and get started now.
Aug 17, 2022
Who Can Benefit from Muhurat Trading? SInce there are so many trades during the Muhurat trading session, it is a good time to buy or sell stocks. Also, the market is usually good because people are optimistic about the economy and stock markets during the holidays because they are thinking about getting rich and being happy. So, the Muhurat trading session is a great time for traders and investors, both experienced and new, to make money. If you've never bought stocks before, Diwali is a great time to start. Look for good companies and buy a few stocks in line with your investing plan and with a long-term view. If you want to get into stock trading, you might want to watch the markets during Muhurat Trading to get a feel for how things work. You should probably do some paper trading as well. Since you can only trade for an hour, markets are known for being very volatile. Because of this, new traders are told to be careful. As a sign of respect for the good luck of the day, most investors and traders will buy or sell stocks during this session. This means that experienced day traders can also make money during this session. It may be more important to do something than to make money from it. So, day traders with experience can make money by taking positions after giving them enough thought. This year, the economy has been hurt by the effects of the pandemic on both businesses and people's lives. Many experts think that the Muhurat trading session in 2022 will be a good one, but you should keep your excitement in your heart and use your mind when choosing trades. Things to think about before getting into Muhurat Trading 1. Most traders and investors think that now is a good time to put money into stocks. 2. At the end of the trading session, all open positions will have to meet certain settlement requirements. 3. On October 24, 2022, there will be a muhurat trading session. On October 24, the markets will be closed for Lakshmi Pooja. 4. Traders need to keep a close eye on the resistance and support levels. During Muhurat trading sessions, it has been said that the markets might move in a random way and not go anywhere. So, as a day trader, you will be able to make better trading decisions if you keep the resistance and support levels at the centre of your trading decisions. 5. Before investing in a company's shares for the long term, investors should make sure they still believe in the company's core values. Most of the time, trading during Muhurat is very exciting, and rumours can spread quickly. Keep things simple and invest based on your investing strategy and how much risk you can handle. 6. Since the trading window is only open for an hour, if you want to make money from the volatility, you should be careful to choose stocks that have a lot of trades. 7. Investing during this time frame does not guarantee a return. Even if the stock has a good Diwali, its performance in the future will depend on how its fundamentals and macroeconomic factors change. Make use of the positive sentiments around Diwali to invest in your favourite stocks. To get started, open your Zebu trading account today.
Aug 16, 2022
The Hindu calendar says that the Festival of Lights, or Diwali, is a lucky time. It shows that good wins over bad, that knowledge wins over ignorance, and that light wins over darkness. Diwali has a lot of different traditions, rituals, and beliefs that go along with it, just like any other religious holiday. One of these is Muhurat trade. Today, we're going to talk about this tradition and tell you everything you need to know about it. What is Muhurat Trading? Before we answer the question, "What is Muhurat Trading?", let's take a look at the word "Muhurat." The word "Muhurat" means a fortunate time. Hindu traditions say that muhurat is a time when the planets are in a good position to make sure success. A lot of traders in India follow a tradition called "Muhurat Trading." On Diwali, this one-hour window is thought to be a good time to buy stocks. The time for Muhurat trading is set by the stock market every year. The belief is that people who trade at this time are said to have a higher chance of being rich and successful for the rest of the year. As a gift to Goddess Lakshmi, most people choose to buy stocks around this time, which is often the evening of Diwali. This is only in the Indian stock market. Muhurat Trading's History When did Muhurat Trading get its start? Many stockbrokers started their new year on Diwali. So, during Diwali, they would open new settlement accounts for their clients during a lucky time called the Muhurat. On Diwali, brokers would also worship their ledgers by doing Chopda Pooja. Many people believe that this time is lucky, so muhurat trade has become more of a symbol than a traditional practise. Most Hindu investors do Lakshmi Pujan, which is a prayer to Goddess Lakshmi, and then buy shares in strong businesses that have the potential to make money in the long run. How do things work at Muhurat Trading? The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) both let people trade on Diwali for a short time. Most of the time, the session has the following parts: 1. Block Deal Session: This is when two people agree to buy or sell a security at a set price and let the stock exchange know about it. 2. During the pre-open session, the stock exchange decides on the price that is just right (usually around eight minutes). 3. During the normal market session, which lasts an hour, most trading takes place. 4. Auction Session: this is when securities that are hard to sell are traded. A security is said to be illiquid if it doesn't meet the requirements of the exchange. 5. During the closing session, people who trade or invest can place a market order at the closing price. To open your account with Zebu to invest during the auspicious day of Muhurat trading, get in touch with us now. To know more about Muhurat Trading, read out next blog for part 2 of this blog post.
Aug 15, 2022
Indians are renowned for their sophisticated financial reasoning, yet there is a severe lack of information and investment appetite when it comes to understanding investing and financial diversification. Young professionals find it challenging to file their taxes, learn about the equity markets, or engage in trading and investing since schools and colleges did not place enough focus on teaching pupils about these significant life subjects. Less than 10% of Indian families participate in alternative assets like mutual funds or equities, the bulk of which choose to preserve their money in bank accounts. When it comes to stock trading and investing, gold, post office savings, and real estate are favoured. While there is nothing wrong with safer investment options like Savings and Fixed Deposits, that money’s value could eventually decline due to inflation. This highlights the necessity of early education in stock trading and investing, educating kids about the ideas of compounding, the stock market, portfolio diversification, and much more that may make them more financially literate as adults. College students have an advantage over other adults who begin investing in their 30s since they are youthful, active, and have the passage of time on their side. Consider a capital of Rs100. It has the potential to earn 10% a year in returns when invested in Nifty 50 stocks. Rs 110 will be the total sum for the first year, Rs 121 for the following year, and Rs. 133 for the following year. For college students, the power of compounding really shines since it gives their money more time to grow. Early investment also enables them to take measured risks without worrying about how they would damage their families and livelihoods. In reality, it provides insight into stock evaluation and investment dangers, enabling customers to evaluate current share prices and watch their rise and fall in order to make wise decisions. Recently, the Sensex and Nifty both reached their all-time highs when it was thought that Indian shares were valued at their highest ever levels. Although the pandemic has led to a weak economy, negative growth, and the lowest GDP ever, the stock market is shattering all previous records. People who lack understanding tend to label anything as "gambling" or unrelated to reality. However, with the right information and its understanding, you can build generational wealth in a few decades. Since students are beginners in investing, even a little investment if done properly, may generate significant returns over time and serve as a reliable source of income. It is a fantastic chance for students or recent graduates to generate enormous returns and support their families. It is crucial to have an accurate understanding of the market before starting to invest, even if it is for a small capital. Here's a quick tip for student investors: Invest in businesses or brands that you use frequently, in products that you require frequently and that are in great demand. By doing this, you boost your chances of getting a positive return because you are a consumer of the brand and are assisting them in growing sales and making profits, which will eventually increase the brand's stock value and benefit you. It goes without saying that investing is a wise approach to increasing money. However, investing all of your funds in the market out of a desire to make money is not a good idea. Trade wisely by becoming knowledgeable about the financial market. Being an early investor, especially during the market's all-time high, should enable you to take advantage of the benefits and see your net worth increase. What investing choices are available to college students? The most fundamental type of financial investment, a savings account enables you to safely deposit money while receiving interest. On certain occasions, the real rate of return obtained from an investment, also known as the annual percentage yield, exceeds 0.50%. Fixed Deposits: These types of accounts are comparable to savings accounts but have a fixed term and a higher fixed interest rate. Stocks: By acquiring a stock, you are effectively buying a share of a certain corporation. Depending on how much stock they possess, the shareholder is entitled to a piece of the corporation's assets and income. Mutual funds: Mutual funds pool the money contributed by several investors and invest it in stocks, bonds, and other assets. The "portfolio" refers to the particular stocks, bonds, and assets that the funds are invested in. Exchange Traded Funds (ETFs): While ETFs and mutual funds both consist of a group of assets, ETFs are specifically created to track a certain index, industry, commodity, or another set of assets. As a result, you may have an ETF that tracks real estate or corporate bonds. You should invest in low-cost, well-diversified ETFs as a college student since they provide you access to hundreds of stocks without requiring you to individually examine each one. Index Funds: An index fund is a similar thing to a collection of assets, but it is tied to an index, such as the Nifty 50 or the Sensex. One benefit of index funds is that they often have cheaper costs as no professional takes the time to choose stocks or bonds for the portfolio. Bonds: A bond is, in the simplest sense, a loan from an investor to a borrower, such as a particular corporation. Bonds are an essential component of a balanced portfolio because they may lessen the impact of a decline in the stock market. As you can see, there are several options for students to choose from. However, they require a significant amount of knowledge to get started. This is where Zebu School comes in. We have market experts who teach about the basics of the share market and help investors make the right financial decisions. Our courses are simple and pocket-friendly and can help you make the most out of the share market. To start learning today, please get in touch with us now.
Aug 13, 2022
After Russia invaded Ukraine, the stock markets in India went down a lot. India imports more than 80% of the energy it needs, and prices for crude oil are going through the roof around the world. Also, international institutional investors have been taking their funds out of the Indian stock markets slowly since October 2021. As investors from all over the world rush to the safety of US government bonds, the Indian stock markets may fall even more. Should you buy stocks during a recession? Why do investors think it's a good time to buy stocks when the economy is down? During a recession, the value of stocks tends to go down. When the stock market goes down, you may be able to buy shares of strong companies for less money. It is a business that is financially stable and has good corporate governance. If you want to invest in stocks that will give you good returns over a long period of time, you should choose companies with an economic moat. These businesses have an edge over their competitors because they have things like strong brands or good distribution networks. During a recession, you might want to invest in the stock market, which is known for long-term growth. Also, a stock market drop happens before a recession, so the economy goes through a stock market crash before it goes through a recession. Before buying stocks, many people wait until the stock market is at its lowest point. Analysts of the stock market warn against using this strategy because it's hard to know when the stock market will hit bottom. To invest in a stock market that is going down, you need to know how to do it right. How to invest your money when the stock market goes down If you're new to the stock market, you might want to invest in a diversified equity mutual fund instead of buying stock in a single company. Investing in stocks from different industries and businesses gives you the chance to spread your risk. For example, weaknesses in one area can be made up for by strengths in another. With a systematic investment plan, or SIP, you can put your money into equity-diversified mutual funds. It is a way to invest a fixed amount of money in a mutual fund scheme on a regular basis. When stock markets go down, you will buy more equity fund units, and when markets go up, you will buy fewer units. It helps make the price of buying units of equity funds more stable over time. If you know a lot about the stock market and are willing to take on more risk, you can invest directly in stocks. It is helpful to do research and choose cyclical companies with strong fundamentals that could do well when stock markets recover. For example, changes in the economy's big picture have an effect on cyclical stocks in industries like financial services, travel, and hospitality. During a bad market, you might want to invest in companies that are safe. Some examples of defensive stocks are those from the fast-moving consumer goods, pharmaceutical, and utility industries. These are the stocks of companies whose products and services are still in high demand even when the economy isn't doing well. During a recession, you shouldn't buy stocks from companies that have a lot of debt on their balance sheets. When the economy is bad, it can be hard for these businesses to pay their interest bills. You could fight the urge to stay away from the stock market when it goes down. If you don't, you'll miss out on important opportunities to make money from the market's recovery and higher returns. During a recession, you might be able to buy fundamentally sound stocks at lower prices. Also, after doing a good job of researching stocks, you need to invest using a good investment strategy.
Aug 12, 2022