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Tag: investment strategies

  • What Is Your Risk Profile?

    You must recall your first bike ride. That is the kind of encounter you will never forget. But, while you were enjoying the ride, there is always that one kid nearby who clearly wished he hadn’t had to go through the horrible experience.

    So, while you were ready to accept the risk of riding a bike, your friend would have preferred to stand back and observe. Similarly, some people may be more willing to accept risks than others when it comes to investing. And your risk profile indicates how much risk you are willing to face when investing.


    Risk Profile

    Everyone has different financial objectives in life. That is, your risk tolerance is determined by your financial ambitions as well as your existing financial health.

    Let’s have a look at the various risk profile groups. There are three major kinds –

    The careful investor – this means that you want to take a low risk.

    The average risk-taker – this indicates that you are willing to take a small level of loss in exchange for higher returns.

    The aggressive risk-taker – this indicates that you are willing to take on more risk in exchange for a higher potential return.

    However, you are not required to fit within any of the categories. Depending on your investment objectives, you can choose to participate in all of them.


    Consider the following example.

    When it comes to keeping an emergency fund, you want to invest in something that will provide you with security and liquidity rather than large profits. In that instance, you choose a low risk, low return profile, showing that you are cautious.

    However, if your financial goal is retirement, which could be 25 years away, you can be an aggressive investor. This is because you want to earn a good return over a long period of time. In this case, the high profits would be directly proportional to the risk. Furthermore, because your investment horizon is decades away, risks can be handled in the long run.

    Start by taking care of emergency funds and investments with low-risk investment options. Then, move on to the funds needed for your children’s education and retirement. Next, adjust your risk appetite to invest in stocks building your wealth.


    You can control investment risks in two ways:

    Invest for the long term.
    Regularly invest little sums.

    Some investors try to outperform the market in a relatively short period of time. However, history has shown that short-term investments do not generate the same level of return as long-term ones. Long-term investment works because bull and bear markets provide wonderful opportunities to ride through the highs and lows of cycles while investing in high-return, high-yielding assets.

    Investing in smaller quantities allows you to benefit from rupee cost averaging. This technique ensures that you purchase more shares (or units) when prices are low and less shares (or units) when prices are high. As a result, you can average out your investment costs and deal with market volatility.

    Furthermore, adopting a disciplined approach, such as investing little sums on a regular basis, helps create excellent financial habits that will undoubtedly come in helpful in the long term.

    Investing tiny amounts over time might help your investments develop. All owing to the compounding power. Earnings from stock investments are reinvested, allowing your investments to generate even greater income. So, even if you start with a tiny amount, the longer your money stays invested, the greater the chance for growth and compounding.

    But did you know that you may utilise both of these methods to reduce risk in high-risk investments?


    Here’s how it works:

    If you have a substantial money to invest in a high-risk investment, consider putting it in a low-risk investment vehicle such as a debt fund. You can then gradually transfer tiny amounts of money from that fund to a high-risk investment vehicle.

    For example, if you wish to invest Rs. 10 lakhs in equities stocks or funds, you can put Rs. 1 lakh into equity stocks or funds in the first month and the remainder in a short-term debt fund.

    The remaining funds can then be transferred in small increments over the next few months.

    This way, you may manage market volatility while still earning high long-term profits.

  • What is the Risk-Reward Matrix?

    If you have seen the recent miniseries about one of India’s famous scammers, you would have come across this phrase: Risk hai to Ishq hai (Where there is a risk, there is love)

    Think about the times that you enjoy going on a long drive. When you started learning how to drive, it must have seemed risky and scary. But now that you are an experienced and good driver, you can enjoy the road to a great extent. All that risk you took seems to be worth it, right?
    The same is true for investment. Every investment has some level of risk. While you cannot prevent risk, you can reduce it by being financially savvy and recognising your risk tolerance.

    The same is true for investment. Every investment has some level of risk. While you cannot prevent risk, you can reduce it by being financially savvy and recognising your risk tolerance.

    So, if you want to achieve your goals, you must invest. But, if no investment is genuinely risk-free, how will you achieve your objectives? That’s a problem! But there is a workaround. You can increase your return potential by diversifying into the correct investments to help limit market volatility and keep your financial goals on track.

    Investment risk-reward matrix

    Every investor seeks an investment opportunity that will provide them with the highest possible profits as quickly as possible. But remember that it’s better to proceed slowly in the correct way than quickly in the wrong direction.

    And, as the saying goes, “all good things take time.” Similarly, investments take time to mature. In terms of investments, the risk-to-reward ratio is an important issue to consider.

    Consider you and your friend deciding to participate in the ‘dice throwing’ Instagram trend. In this game, your friend suggests that each of you contribute Rs. 500, for a total contribution of Rs. 1000. You will win the complete money if the dice is tossed and lands on an even number. Your friend stands to win if it is an odd number. The risk to reward ratio, in this case, is 1:1, as both of you have a 50% chance of winning the money you put in.

    It doesn’t sound like an attractive investment, does it? Assume you opted not to play.

    Your friend decides to up the stakes after hearing this. He modifies the game and recommends that if you contribute 500, he would place three times that amount, or 1500, for the same bargain.

    This sounds amazing, doesn’t it? You still have a half-chance of winning. If you win, he will receive Rs. 1500, which is three times your initial investment. As a result, the risk to reward ratio is 1:3.

    In technical terms, the risk to reward ratio is a valuable measure that helps gauge an investment’s profit (reward) relative to its potential loss (risk).

    We have already learned that each investment carries a certain level of risk. According to the industry, the greater the risk, the greater the reward.

    We’ll look at common assets and their risk-reward ratios to see what you may expect if you invest in them.

    Equity

    Shares and equities are the most volatile of all investments, making them the riskiest. However, it has the greatest potential for long-term profitability.

    Debt/bonds

    Debt securities are issued with the promise of interest payment. Because the risk is lower, the rewards achieved over time may not be as great as in the case of equities.

    Property investment

    The real estate market is volatile by nature. Key risks are determined by a variety of factors such as geography, demand, structural challenges, and a lack of liquidity. Based on all of these criteria, the risks associated with real estate investing are likely to be comparable to those associated with equities and bonds.

    Gold

    When it comes to gold investment risks, the expense of keeping and insuring the precious metal may be included. However, you can now invest in gold through Sovereign Gold Bonds (SGB), digital gold, gold ETFs, and gold mutual funds. Investing in gold provides diversification and a distinct blend of reward benefits. However, the risks associated with commodities such as gold are determined by market demand and supply.

    Varied assets will provide you with different growth rates. After reading about the various degrees of risk associated with each investment, you may be wondering, what if you just keep the money at home? Wouldn’t that imply no risk?

    Keeping cash at home, for example, may be dangerous. Alternatively, simply having money in a savings account exposes it to inflation. This means that the money will continue to lose value over time. And that’s an extra risk you’d be incurring. So, it is always better to invest.

  • Types Of Stocks In The Indian Share Market – Part 2

    In the previous blog, we discussed a few important types of stocks. Now, let’s look at the other major categories.

    5. Value Stocks

    These are stocks that are trading below their worth or intrinsic value. What exactly is intrinsic value?

    It is the true worth of the company based on estimates rather than the market price of the company’s stocks.

    Consider the following example:

    Assume you come across a firm called Sheetal Communications, which has a current share price of Rs. 500. However, based on your calculations, the company’s intrinsic value is Rs. 600 per share. The stock market will eventually recognise the company’s true worth, and the stock will grow correspondingly.

    Value stocks are inexpensive and have the potential to generate high returns over time.

    However, both value companies and terrible stocks are available at a low valuation.

    So how do you tell the difference between the two?

    Remember that value stocks are quality businesses that have been momentarily trading at lower prices and have the ability to resurge and prosper in the future. Some possible reasons for a temporary decline include results falling short of expectations for a quarter, a brief piece of bad news riding strong sentiment but with a smaller financial impact, or simply poor market mood. Weak stocks, on the other hand, have limited liquidity, inconsistent earnings history, or poor metrics on conventional financial parameters.

    6. Growth Stocks

    You might have guessed how stocks in this category work. These are companies whose earnings are expanding faster than those of their peer group.

    However, because of their stronger growth rate, these stocks require a higher investment than their rivals. They require additional capital to expand due to their rapid growth. As a result, these stocks will pay no or very little dividends and will reinvest earnings largely in the firm.

    However, the difficulty with these stocks is that a company’s rapid growth rate does not usually last long. This means that when the company’s growth rate returns to normal, the stock price may decline with it.

    7. GARP Stocks

    GARP, or Growth at Reasonable Price, is a hybrid of growth and value investment. GARP investing identifies growth stocks that are accessible at a reasonable valuation.

    The goal is to find growth firms that consistently exhibit above-average earnings growth while trading at a low value. These equities have an average P/E ratio and a greater rate of earnings growth, resulting in a PEG ratio of one or less than one.

    However, there is a distinction between GARP and value investing.

    Value investors seek out stocks that are inexpensive, but the chance of losing money with GARP is negligible.

    8. Momentum Stocks

    Momentum stocks are based on the idea that if a stock is rising, it will continue to rise for some time. This means that investors would buy rising stocks and sell them when they appear to have peaked.

    It is usual for investors to buy up-trend momentum equities at greater prices with the hope of selling at even higher prices. Early riders on the momentum rally benefit the most.

    However, momentum can be a trap for new investors if they enter the stock too late, especially if the up-move is about to end.

    When a stock begins to rise in price, investors become concerned that they will miss the next major move and begin to buy. This causes the stock to rise even higher, and so on.

    Momentum investing is based on technical information rather than fundamentals. And, while momentum investing may not be a good option for inexperienced investors, when done correctly, it can result in remarkable profits.

    9. Income stocks

    These investors want a steady income with the possibility of capital appreciation. Income stocks are less risky than other equities in the market. Companies in the income stock category receive extra income in the form of dividends that the company pays per share.

  • Types Of Stocks In The Indian Share Market – Part 1

    When it comes to investing in the stock market, you have so many options to choose from! You can choose from over 5000 companies based on your risk-taking abilities and market conditions. However, these stocks can be classified broadly into a few types that will make investing easy for you.

    Let’s look at the many types of stocks and how to choose them.

    1. Blue-chip stocks

    Blue-chip stocks are top-rated stocks that you might be very familiar with. For example, Reliance, TCS, Nestle, and Asian Paints are a few blue-chip companies.

    But do you know what these businesses all have in common?
    They’ve been in business for a long time.
    They are well-known with a long track record of performance.
    Show consistency in performance
    Are pioneers in their respective sectors
    Have strong financials
    These companies’ stocks are good buys.

    Since these companies are the best in their respective industries, they can provide consistent returns. More importantly, because they are at the top of their game, you may not notice a significant decline.
    Are very liquid since there are always investors wanting to acquire these equities.

    Before we proceed, let’s discuss an important market term – beta.
    Who doesn’t like the attractive combination of predictable returns and low volatility? But how does one evaluate both of these combinations in a single stock? There are numerous methods for evaluating a firm, but one efficient method is to examine its Beta.

    What exactly is a Beta?
    Beta is a measure of stock volatility in relation to stock indices such as the Nifty, which has a beta of one.

    A stock is regarded as more volatile than the index if its beta is greater than one. It is typically favoured by aggressive investors with a high-risk tolerance. A stock with a beta of less than one, on the other hand, is considered low volatile and is chosen by conservative investors with a low-risk appetite. Beta can also be referred to as market risk or systematic risk.

    2. High-beta stocks

    Stocks with a beta greater than one are considered high beta. Because of their high beta, these companies are volatile and are preferred by aggressive investors. They also have the potential to outperform the benchmark index in terms of returns. Stocks in financial services, infrastructure, metals, and other industries are considered high beta.

    So, what are stocks with a low beta value called?

    That brings us to our next stock kind.

    3. Defensive stocks

    In layman’s terms, defensive stocks are equities issued by corporations that are not affected by economic cycles. Companies in this area include healthcare, utilities, and food & drinks, among others.

    Regardless of the state of the economy, you will require food, healthcare, and electricity. So, these are not affected by economic events.

    These stocks often have a beta of less than one and are considered low volatile. Despite a market slump, these equities are unlikely to decline significantly in comparison to other stocks. As a result, they are often favoured by investors who do not wish to take on a significant level of risk with their equity portfolios.

    But what kind of equities are genuinely affected by the economic cycle?

    4. Cyclical securities


    Cyclical equities, on the other hand, are corporations whose performance is affected by economic cycles.

    When the economy is in a boom, there is a strong demand for these companies’ products, which leads to better profitability and rising stock values. When the economy is in a slump, however, demand for these industries’ products falls, resulting in fewer earnings and a drop in stock price. Steel, cement, infrastructure, vehicle manufacturers, and real estate firms are examples of companies that belong within this category.

    You may have guessed why by now.

    Because budget cuts make it less probable to buy a new automobile or a new house while the economy is struggling.

    In the next blog post, let’s discuss more types of stocks.

  • For The Most Beginner Investors, Here Are 5 Aspects You Should Be Mindful Of

    Investing is the most important way to build wealth and you don’t need to be an expert in the share market to be profitable. If you are unsure of how to choose the right stocks, you can always hand over the burden to the experts and simply invest in mutual funds. If you stay invested even for 20 years with an approximate return of 12% per annum, you can not only beat inflation but also create an immense amount of wealth. If you are just starting out on your first job, invest as much as you can spare and keep increasing the amount with every hike that you get. Here are 5 important aspects you should know before starting your investment journey.

    Risk and Return

    When it comes to investing, Risk and Return are closely linked. The larger the risk, the higher the possible return. You should never chase high-return investments on a whim. Consider your investing aim, time horizon, and risk tolerance. Always invest in something that is right for you.

    Diversification of risks

    Any investment entails some level of risk. You can’t prevent it, but you can limit the odds of big losses by managing your risk exposure with the correct strategy. Diversifying your investments and spreading your risk is the simplest and most effective method. Diversifying your investments across asset types, such as equities, bonds, and savings, is a good way to go.

    Consistency

    By committing to a consistent schedule for investing, say monthly, you can limit the risks of loss due to sharp moves on either side. Identify quality stocks and invest in them every month for good, long-term returns. ,b>Compound Interest Because the interest generated grows your principal (the money you put in), you obtain a bigger return. It’s a snowball effect: the longer you invest, the more compound interest benefits you. As a result, it is critical to begin saving and investing as soon as possible.

    Inflation> Inflation has been a constant in Hong Kong for the past few decades. Your investment must have a return rate that is equal to or greater than inflation. If you don’t, your money will lose value.

  • Six Of The Safest Investment Options For Risk-Averse Individuals

    In India, there are several investment opportunities that give attractive returns. With so many alternatives, it’s understandable that one would be confused about where to invest. To determine which investment channel is the ‘best,’ we must first assess an individual’s requirement and risk tolerance. There are investment solutions that are tailored to an individual’s objectives and needs.

    Indians prefer to invest in government-backed securities since they are viewed as safe investment vehicles. The following are a handful of India’s most popular investment avenues:

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    Bank Fixed Deposit (FD)

    Bank Fixed Deposit (FD) Bank FDs pay a substantially greater interest rate than standard savings bank accounts. 5-year tax-saving FDs are tax-deductible under Section 80C of the Income Tax Act, 1961, and investors can deduct up to Rs 1,50,000 per year. Senior citizens receive a little higher rate of interest on FDs. The rate of interest varies according to the duration of the investment, the amount invested, the resident status (NRI or not), and the bank. FDs are subject to a lock-in term. If you desire to withdraw within the lock-in period, the bank will charge you a penalty in the amount of interest deducted from the investment.

    The following are the primary features of bank deposits:
    You receive guaranteed returns over time.
    The most suitable investment for risk-averse investors.
    Partial withdrawals are permitted, as is borrowing against the balance.

    Public Provident Fund (PPF)

    PPF investments are subject to a 15-year lock-in term. PPF is regarded as one of the safest investments due to the scheme’s governmental guarantee. As with bank FDs, PPFs pay a substantially greater interest rate than a standard savings bank account.

    PPF’s key attributes include the following:
    Best suited for long-term financial goals due to the scheme’s 15-year lock-in period.
    Because the investment is not market-linked, it provides guaranteed returns over time.
    You have the choice of redeeming the entire corpus or extending the account for a five-year period.

    National Pension Scheme (NPS)

    The NPS is another government-sponsored retirement programme. The Pension Fund Regulatory and Development Authority manages the scheme (PFRDA). The NPS is made up of a variety of investments, including liquid funds, term deposits, and corporate bonds. There are numerous NPS schemes from which you can choose according to your needs. Interest rates vary amongst funds.

    NPS’s primary characteristics include the following:
    The scheme is offered to employees in all sectors.
    The scheme allows for annual tax deductions of up to Rs 2 lakh under the Income Tax Act, 1961.
    You can manage your portfolio passively or actively.

    Sovereign Gold Bonds

    Sovereign Gold Bonds Indians have a strong affinity toward the yellow metal. Gold investments are made through the purchase of gold jewellery, coins, and bars. Apart from real gold, investors can invest in gold through gold ETFs and sovereign gold bonds.

    SGB’s primary characteristics include the following:
    Investing in gold enables you to protect yourself against inflation.
    Due to the inverse relationship between gold and stock markets, investing in gold functions as a hedge against stock market declines.
    Gold’s price does not fluctuate dramatically over time, providing you with capital protection.
    SGBs give an interest of 2.5% per annum.
    The lock-in period is 8 years.
    SGBs are issued by the RBI.

    7.75% GoI Savings Bond

    7.75% G-Sec bonds replaced the previous 8% savings bond. These bonds were initially issued in 2018. As mentioned in the title, investors get annual interest at a rate of 7.75 percent. These bonds can be purchased for as little as Rs 1,000.

    The following are the primary characteristics of 7.75 percent GOI Savings Bonds:
    Your investments are guaranteed by governmental assurances, which safeguard your capital.
    You receive an assured annual rate of return of 7.75 percent.

    Recurring Deposit (RD)

    A recurring deposit is an alternative to a fixed-term deposit. Individuals invest a fixed sum on a regular basis using RDs. As with FDs, RDs pay a significantly greater rate of interest than a standard savings bank account. You can use your real estate development investment as collateral to obtain secured loans.

    RD’s primary characteristics include the following:
    Investing in an RD over a longer-term enables you to gradually instil a feeling of financial discipline.
    You do not need a significant sum to begin your investment; a small sum is sufficient.
    You have guaranteed profits over time because the investment is not tied to the stock market.

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  • Five Market Theories You Should Know About

    When it comes to investing, there are several theories on what makes markets tick and what a given market move indicates. The two major Wall Street factions are divided along theoretical lines: those who believe in the efficient market theory and those who believe the market can be defeated. Although this is a basic distinction, other theories attempt to explain and affect the market, as well as investment behaviour.

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    1. Theorem of Efficient Markets

    The efficient markets hypothesis (EMH) continues to be a point of contention. According to the EMH, the market price of a stock integrates all available information about that stock. This signifies that the stock is priced appropriately until a future event alters the price. Given the uncertainty of the future, a devotee of EMH is significantly better suited to owning a diverse range of companies and gaining from the market’s overall increase. You either believe in it and employ passive, wide market investment strategies, or you dislike it and concentrate on stocks with high growth potential, undervalued assets, and so on.

    Those who oppose EMH refer to Warren Buffett and other investors who have repeatedly outperformed the market by identifying irrational pricing inside the broader market.

    2. The Fifty-Percent Rule

    The fifty-per cent principle predicts that an observed trend will experience a price correction equal to about half to two-thirds of the change in price before continuing. This suggests that if a stock has been rising and gained 20%, it will lose 10% before continuing to increase. This is an extreme example, as this rule is frequently used for the short-term trends on which the technical analysts and traders trade.

    This correction is considered to be a normal component of the trend, as it is typically triggered by fearful investors taking profits early in order to prevent being caught in a true trend reversal later on. If the correction is greater than 50% of the price change, it is interpreted as a sign that the trend has failed and the reverse has occurred early.

    3. The Greater Fool Hypothesis

    According to the greater fool theory, investing is profitable as long as there is a greater fool than yourself willing to purchase the investment at a higher price. This means that you can profit from an overpriced stock as long as another party is prepared to pay a premium to acquire it from you.

    As the market for any investment overheats, you eventually run out of fools. Investing on the basis of the larger fool theory entails disregarding valuations, earnings reports, and all other data. Ignoring data is just as risky as paying too much attention to it, and hence those who believe in the greater fool hypothesis may find themselves on the losing end of a market correction.

    4. The Theory of Odd Lot

    The odd lot hypothesis uses the sale of odd lots — small blocks of shares held by individual investors – to calculate the best time to invest in a firm. When small investors sell out, investors use the odd-lot theory buy-in. The underlying idea is that small investors are frequently incorrect.

    The odd lot theory is a contrarian technique based on a deceptively simple sort of technical analysis – odd-lot sales measurement. How successful an investor or trader is in applying the theory is highly dependent on whether he investigates the fundamentals of the firms the theory suggests or simply buys blindly.

    5. Prospect Theory

    Prospect theory is often referred to as loss aversion theory. According to prospect theory, people’s views of gain and loss are distorted. That is, people are more fearful of loss than of gain. When people are presented with two contrasting prospects, they will choose the one that they believe has a lower probability of ending in a loss over the one that promises the most gains.

    For instance, if you offer a person two investments, one that has returned 5% each year and another that has returned 12%, lost 2.5 per cent, and returned 6% in the same years, the person will choose the 5% investment because he places an irrational premium on the single loss while ignoring the larger gains. Both alternatives in the previous example generate a net total return after three years.

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  • 5 Important Technical Analysis Indicators That Investors Should Know

    Technical analysis is useful in a variety of situations. It can be used to trade stocks, futures, and commodities, as well as fixed-income securities, FX, and other financial instruments.

    Technical analysis is the art and science of predicting future prices based on the analysis of historical price movements. Using historical market data, mass investor psychology is examined. The data set comprises information about the price, the date, and the volume.

    A price chart provides the most useful information for reading a historical description of a security’s price movement over time. Charts are significantly more readable than a table of numbers. Volume bars are shown at the bottom of most stock charts. It is simple to recognise market reactions before and after major events, past and present volatility, historical volume or trade levels, and relative strength of the company vs the index using this historical image.

    Before we get into the importance of technical analysis indicators, you need to have the right technologies. At Zebu, one of the fastest-growing brokerage firms in the country, we have created the best Indian trading platform with the lowest brokerage for intraday trading. If you would like to simplify your option trading and investment game, we are here to help you out.

    The following are five indicators that every investor should be aware of:

    1) The Relative Strength Index (RSI)

    The RSI is a momentum oscillator that measures the amount and pace of directional price changes. RSI calculates the momentum of a stock with the rate at which a price rises or falls. The RSI calculates momentum by dividing the number of higher closes by the number of lower closures. The RSI of stocks that have experienced more or stronger positive movements is greater than the RSI of equities that have experienced more or stronger negative changes.

    The indicator has a 70-point top line, a 30-point lower line, and a 50-point dashed mid-line. When a price rises rapidly, it is called overbought at some time (When the RSI crosses 70). Similarly, when the price falls swiftly, it is termed oversold at some point (when the RSI passes 30). The RSI level is a gauge of the stock’s recent trading strength. The slope of the RSI is proportionate to the rate at which a trend changes. The RSI’s move is directly proportional to the degree of the movement.

    2) Moving averages
    In technical analysis, moving averages are one of the oldest and most useful technical indicators. When used in conjunction with other oscillators such as MACD and RSI, moving indicates a trend in a “smoothed” manner and can provide trustworthy signals.

    The three types of moving averages are simple moving average (SMA), exponential moving average (EMA), and weighted moving average (WMA).

    Moving averages for stocks are commonly used for 10 days, 21 days, 50 days, 100 days, and 200 days. The simple moving average is the most widely used moving average (SMA). Single SMAs can be utilised to spot a trend, but we found that using a dual or triple moving average is more effective.

    3) Stochastic Oscillator

    The Stochastic Oscillator is a momentum indicator that depicts the current close’s position in relation to the high and low ranges across a set of periods. Closing levels that are constantly near the top of the range suggest accumulation (buying pressure), while those that are consistently towards the bottom of the range indicate distribution (selling pressure). The premise behind this indicator is that prices tend to close near their highs in an upward-trending market and near their lows in a downward-trending market.

    4. Bollinger Band

    John Bollinger developed Bollinger Bands as a technical trading technique in the early 1980s. Bollinger Bands are used to define high and low points relative to each other. Prices are high in the top band and low in the lower band by definition. This definition can help with pattern recognition and can be used to compare price action to indication behaviour. Bollinger Bands are a series of three curves that are drawn in connection to stock prices. The middle band, which is usually a simple moving average that acts as the base for the higher and lower bands, is a gauge of the intermediate-term trend. Volatility, which is often the standard deviation of the same data used for the average, determines the gap between the upper and lower bands and the central band. You can change the default parameters, which are 20 periods and two standard deviations, to fit your needs.

    5) Parabolic SAR (Parabolic Stop and Reverse)

    SAR, or stop-and-reversal, is a technical analysis strategy that uses a trailing stop and reverse method to discover appropriate exit and entry locations. J. Wells Wilder came up with this strategy. Basically, one should sell if the stock is trading below the parabolic SAR (PSAR). If the stock price is higher than the SAR, it is a good time to buy (or stay long).


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  • Things To Learn From PayTM IPO

    Paytm is a startup that has gained a lot of attention for the way it has made it possible for Indians to recharge their phones and pay their bills online. Vijay Sharma, the founder, is the face of pure inspiration. He is a typical ‘small-town lad’ who had huge goals and worked late to build his firm. Many in the industry were looking forward to Paytm’s first public offering (IPO), but it fell short of expectations and disappointed most investors. However, like with any failure, there are lessons to be gained from the Paytm IPO disaster, which should be remembered when investing in future IPOs.

    Are you planning to invest? Before you start investing, it is important that you do so with one of the best share brokers in the country. At Zebu, we have the lowest brokerage for investments and also support you with a highly advanced online trading platform to help you analyse stocks and execute your trades.


    The history

    Investing in an IPO should be a well-considered decision, and investors should do their homework before devoting cash to any IPO, whether it is a well-known firm or not. The prospect of an IPO was clearly attractive in the case of Paytm, and the company’s exponential growth after demonetization is well documented. However, the corporation did make several mistakes, which analysts now recognize. Some of the corporate transitions, for example, were savvy and took advantage of opportunities, while others were risky.

    Learning Lesson

    Many experts consider Paytm to be a very new-age business strategy. As a result, the same experts think that when investors choose to join into any transactions with such firms in mind, such as making IPO investments, they must understand the company’s dynamics, understand prospective valuations, and evaluate the company’s future plans and growth strategy. As a result, investors who invest in an IPO cannot blame the IPO’s failure on their own lack of understanding prior to investing.

    The most important thing to remember when investing in an initial public offering (IPO) is to be tremendously confident in the firm. Second, a small number of radical businesses/companies have specialty technology and market share. Although some companies do well, such as Zomato and Nykaa, some do not have such blockbuster lists. The Paytm IPO was expected to be a blockbuster, but values were pushed well past their limitations. Investors frequently make mistakes in how they evaluate a firm and base their assumptions on that, rather than conducting a thorough fundamental analysis.

    Educate yourself and make wise investments.

    Paytm’s stock plummeted by 58 percent after the business was listed on the stock exchange. It went from a $20 billion valuation to a meager $7.8 billion valuation. Now, the company is frantically trying to persuade investors of its steady growth trajectory in the hopes of regaining some funds. However, when it comes to IPO investment, people aren’t thinking about Paytm because the company’s mounting expenses and a global sell-off of its stock have cast a pall over its future prospects.

    Going forward, the most important lesson is to understand the business and then the valuation. If it does not seem fair to you, do not put your hard-earned money into it.


    Two of the most important checklists for first-time traders and investors are the right online trading platform and the lowest brokerage for investments. As one of the best share brokers in the country, we at Zebu will give you all of this and more. To know more about our services and products, please get in touch with us now.

  • Why You Should Invest In US-based Stocks

    We Indians use apps like Google, Amazon, and Instagram on a daily basis in today’s digital environment. A Dell or MacBook laptop is likely to be used by you or someone you know. Many of the world’s largest corporations, including these, are headquartered in the United States but have a global presence. Have you thought about investing in such high-growth businesses but are hesitant due to their location? Let’s have a look at some of the benefits of investing in US stocks as an Indian.

    For when you consider investing or trading in the share market, we at Zebu, a share trading company offer the lowest brokerage for intraday trading and are one of top brokers in share market.


    1. Access to multinational corporations

    All of the major technology businesses, such as Google and Apple, as well as well-known brands like Nike and Starbucks, are based in the United States. Another thing that all of these US businesses have in common is that they are all global. These businesses are well-known all across the world. The US equities market has a market value of $47.32 trillion due to its global prominence, while the Indian equity market has a market capitalization of $3.21 trillion. As a result, investing in these businesses can help you broaden your horizons.

    2. Fractional Shares

    The current price of an Apple stock is 173 dollars or nearly 12,500 Rupees. Similarly, an Amazon stock currently costs 3321 dollars or over 2.3 lakh rupees. One could argue that US stocks are overvalued and not a long-term investment. However, one fantastic feature of the US stock market is the ability to buy fractional shares. Let’s say you only have Rs. 20,000. You can put Rs 5,000 into each of your four favorite American companies, and so on. This characteristic of fractional shares allows investors to spread their money across a number of companies. You need not own an entire share.

    3. Expanding your horizons

    Political unrest, elections, budget cuts, and natural calamities can have a significant impact on a country’s stock market. Diversifying your holdings is a fantastic way to protect your investments from a sudden drop. While gold and bonds can help you diversify your portfolio, investing in US equities can help you diversify your portfolio while also setting you up for potentially good profits.

    4. The monetary value

    When you buy equities in the United States, you are doing so in dollars. Today’s dollar-to-rupee exchange rate is 76.33. Half a decade ago, it was much less. When compared to the rupee, the US dollar has gained by more than 18% in the last five years. When you invest in US equities, you’re not just betting on the stock’s worth, but also on the value of the dollar. If the value of the dollar rises against the rupee, so does the value of your investment.

    5. Global Reach

    We live in a world that needs technology to emerge every year. The United States is endowed with resources and draws talented minds from throughout the globe. Companies in the United States are always inventing to offer revolutionary solutions to the market. Companies like Tesla, Meta, and Amazon have been working on disruptive solutions in numerous fields in recent years. You can join this wave of innovation by investing in such US enterprises.

    Conclusion
    Portfolio diversification is critical for any investor. For an Indian investor looking to invest in global companies and innovative solutions, US stocks are a good choice. And with Zebu, you can do that with ease.

    We at Zebu, a share trading company make it easier for you to invest in the share market by offering the lowest brokerage for intraday trading and are one of top brokers in share market.