Introduction
The financial markets provide a unique opportunity for businesses to tap into institutions & individuals who are holding capital.
This capital can be deployed aptly to generate sustainable returns.
Fig 1. Capital Deployment [1]
This seems to be a sustainable model but in this world not everything functions ideally!!
We all remember the various frauds & insider trading instances which have caused rapid fluctuation in securities leading to massive loss to the investors[2].
Owing to this, investors especially retail normally shy away from investing in the financial markets to beat inflation.
So, how can this be overcome??
By striking a balance……
Striking a Balance
This methodology involves the following prior to investing[3][4][5]
- Check the financials
- Avoid Believing in Hype
- Do not go as per recommendation or tips of ‘experts’ which are not backed by rationale
- Do factor in volatility
- Do set a target for exit
Now, all the other steps are based on individual discretion.
Let us dig further with regards to point 1
Check the Financials
This can be done by an individual/retail investor as follows
- Company’s Website, Orderbook & Balancesheet
- Reports from Rating Agencies[6][7]
Credit Rating Information Services of India Limited (CRISIL)
Credit Analysis and Research limited (CARE)
India Ratings etc……
- Websites of Analysis Companies
- Money Control
- Value Research
- Economic Times
- NDTV Profit etc……
- Websites of Financial Services Companies[8][9][10]
- IIFL
- Motilal Oswal
- SBI Cap Securities Ltd.
- Nomura
- Prabhudas Lilladher
- L&T Capital etc……
Fig 2. Investor with detailed analysis [5]
This should give a good estimate regarding any listed security to an investor.
Fig 3. Empowered Investor[11]
PS: This post is meant to empower investors & not to endorse any specific brand
If you want to share your opinion kindly do so in the comments section or email me at u2d2tech@gmail.com.
References:
- https://pixabay.com/photo-1015294/
- https://www.equitymaster.com/dailyreckoning/detail.asp?date=11/13/2015&story=3&title=Does-the-Sensex-really-give-a-return-of-16-per-year-in-the-long-run
- https://www.sec.gov/investor/pubs/tenthingstoconsider.htm
- https://www.marketwatch.com/story/how-to-choose-a-stock-1305567953708
- https://pixabay.com/en/analyzing-profit-business-3693455/
- https://www.bankbazaar.com/cibil/credit-rating-agencies-in-india.html?ck=Y%2BziX71XnZjIM9ZwEflsyDsO9VnR8LpQRsz3uWdSlXG8EYDLPo4PODDlYb2HeJM3Y6kVa0rIzPLBlPkhX6C79g%3D%3D&rc=1
- https://en.m.wikipedia.org/wiki/Category:Credit_rating_agencies_in_India
- https://www.bankerbay.com/c/India/Financial-Services-Companies/IN/8/All/1
- https://www.ibef.org/industry/financial-services-india/showcase
- https://en.m.wikipedia.org/wiki/Financial_services
- https://pixabay.com/en/money-forex-market-term-concept-1816365/
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