There are around 80 million active stock market investors in India. This data from the National Stock Exchange represents that about 17 percent of households in India are directly involved in stock market investment. One of the primary reasons for this vast number is the long-term result of strategically made stock trading. Every investor carries multiple strategies for safe investment. Investing your money in the stock market without a plan is like playing a cricket match to win a trophy. If you are new to the investment domain, the right way is to connect with the best stock broker in India who can help you build your portfolio in the right way using their proven strategies.
To help you further, this article presents some proven strategies for successful stock market investment. Both portfolio managers and investors can choose these techniques.
Top proven strategies for successful stock market investment-
- Value Investing
In the early 1920s, American Economist Benjamin Graham created an investment method called Value Investment, but Warren Buffet popularized this creation further. The basic idea behind value investing is to purchase stocks at a discount on their reasonable value. It requires much research into the underlying firms’ fundamentals to find undervalued stocks.
However, to earn a good return from the best stock investment option, you should have the patience to wait for months or years. The best is to hand over the job to a professional stockbroker who can complete your value investment task for a good return.
Under this approach, investors look for stocks trading below their actual value. There are two types of valuations- Overvaluation and Undervaluation.
Overvaluation happens when the trading price of the stock increases more than its value. Undervaluation happens when its market price falls below its inherent value.
The best custom the investors follow is buying the stock when the rate is below the said market price and sell it when the value is more than the market. As mentioned, keeping an eye on the investment and having enough patience is the key to gaining a good return. The best stock broker in India can help you get the correct value or return from this strategy.
- Income Investing
The aim of using this income investing strategy is to get long-term inflow of income. You need to choose right investment options including stocks, exchange-traded funds, bonds, etc. In other words, these types of income investments offer long-term passive income to your portfolio. Moreover, the revenues are low-risk dividends and interest returns. Income investing stock strategy is for those looking for additional money inflow from their respective assets.
One legitimate purpose of adopting this income investment is to generate income in retirement, which is how income investment is commonly conceived. At any point in an investor’s life, income investing is a legitimate way to make money.
- Growth Investment
The goal of this strategy is capital growth. When using this technique, investors typically buy the stocks of companies showing indications of above-average earnings growth compared to the market or industry sector. These businesses are typically new, offering a higher risk due to their large potential rewards.
Most growth stock companies re-invest their earnings rather than providing dividends to shareholders. This is because the of the income growth focus. If you are investing in companies that deal with tech products, and having good growth projection, there is a high chance of better return out of stock. This is being done to see higher stock prices as the company is predicted to perform better.
These businesses typically possess patents or access to technologies that give them a competitive edge and guarantee long-term success.
- Short Selling
Most investors consider short selling, or the sale of borrowed assets or financial instruments, one of the riskiest stock market investing methods, and beginners shouldn’t try it. Short-selling ETFs are preferable to short-selling individual stocks because of the reduced cost of borrowing and the potential for a short squeeze—a trading scenario in which an asset or commodity that has been severely shortened price rises.
Those just getting started should seek help from the best stock broker in India who can assist in safe short selling. Trading ETFs for short sales also allows traders to earn from various investing concepts.
- Small-Cap Investing
Small-cap investing is a stock investment done by investors in companies with market capitalizations typically between $300 million and $2 billion. These are not safe investments. These companies are appealing because, in contrast to large-cap equities, which are highly valued because they are widely known, investors typically avoid them because of their riskiness and institutional investor restrictions. Since these equities are volatile, investors need to be knowledgeable about stock market investments.
- Diversifying Investments
Seasoned investors do most of the stock diversification following careful risk assessment and categorization. However, new investors will need to examine the stock market, understand the techniques of diversifying before going ahead.
One of the ways to earn good return and bring down the risk is diversifying your investment or risk. You need to check multiple companies performing well in the market in terms of values and increase in their stock value by certain percentage.
With the diversification of the investment, you can invest only some of the money in a single company as you can recover some of your losses from other businesses.
- Active Trading
Active trading is complex. If you are an experienced stock trader, you can get good returns. Most traders use research strategies focusing on movements in stock prices rather than metrics related to the underlying company.
As a result, shorter-term adjustments can benefit you. You can use leverage in your tactics. With this trading approach, you can operate on any period, including days, weeks, minutes, and even seconds. To observe current stock price patterns, use price data from charting systems. These are used to forecast future price fluctuations.
- Embracing Stock Volatile Nature
The volatile nature of stock markets can affect your portfolio, but assuming that this influence will always be negative can be dangerous. An experienced stock market investor can benefit from possibilities that arise from market turmoil. Volatility can provide entry possibilities for investors with long-term time horizons and investing plans.
Due to declining market volatility, optimistic investors who believe in good performance in the long run will have the opportunity to purchase additional shares at a discounted rate. Investors need to come to terms with the fact that market volatility will always exist and prepare their strategies and thoughts accordingly.
Choosing the Best Stock Broker in India
Stock trading is a manipulating game which you need to master with years of experience. No matter how experienced you are, it is important to have an expert advice. Since many options are available, choosing the best stock broker in India is quite a task. Since we have helped you with proven stock investment strategies, we will also help you select a stockbroker platform.
Some of the things to consider are-
- Check Credibility
The first step is to check the credibility, and to evaluate the same is to look at the regulatory compliance. Verify if the stockbroker company or platform is registered with the Securities and Exchange Board of India (SEBI), which overlooks the country’s securities industry. This guarantees that they follow stringent rules and laws. Furthermore, check the duration of the stockbroker’s business operations. This can help check the stability and performance history, but more is needed to ensure their credibility.
- Technology or Tools Used
From algo trading to direct stock trading, various methods are used by trading platforms. The best stock broker in India must provide you with an intuitive online trading platform with advanced features. These features help in smooth trade execution, charts, indicators, and real-time market data.
Besides, the platform you are using for the investment purpose, must be aligned with other tools including smartphones for real-time access. Moreover, a platform should ensure that all your personal and stock investment data are safe. Every trading site must have multiple verification process for the safety of data.
- Customer Support
Another important consideration is the customer support service offered by the stockbroker. A reliable and efficient customer support system can make all the difference to your trading experience. A reputable stockbroker will provide their customers with numerous avenues for connection, including social media channels, phone, email assistance and live chat. Having multiple channels of communication can help you stay connected with the support team during any query or issues with the investment.
Over the decades, stock market trading has been the major investment options for those who are good with numbers and markets. Stock trading is not everyone’s cup of coffee. Selecting the right stocks requires thoroughly studying various subjects, including economics, finance, and investing fundamentals, which will help you get short- and long-term returns. There are different ways or steps you need to follow including the above-mentioned strategies. No matter you are new into this stock trading or carry a certain year of experience, hiring the best stock broker in India is a wise decision you must take.