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December 2021

Finance

What is Your Method of Value Investing in General?

The Beginner's Guide To Value Investing

Value investing is the strategy of investing in undervalued stocks trading for less than their intrinsic value. It is based on the belief that the market will react to good or bad news resulting in stock price movements in your favour. 

Meaning: 

Well, imagine buying a Rs 20 chocolate from a superstore near you and then buying the same chocolate from your local store for Rs 18. As a businessman, wouldn’t you buy Rs 18 chocolate, sell it for Rs 20 and then make a Rs 2 profit? Well, that’s what value investing is—buying low, selling high. 

The basic concept behind everyday value investing is straightforward: If you know the true value of something, you can save a lot of money when you buy it on sale. Most folks would agree that whether you buy a new TV on sale, or at full price, you’re getting the same TV with the same screen size and picture quality.

In the sense of the stock market, as a value investor you would focus on buying stocks that are undervalued, waiting for the right time to sell them off and reap the benefits of your patience. However, millennials don’t buy stock as a long-term investment but rather as a quick cash option, which is not intelligent investing.  

Now, if you are wondering how to take the first step towards value investing, well it’s simple. 

  1. Find

Usually, when you invest in equity, you find the right company first. Similarly, as a value investor, you have to find the right company, the right stocks to invest in, keeping in mind the companies that will prosper in the days to come, whose stock price is low and which ones are doing well but are not known to many. So, basically, you have to analyse the company to find the best investment option. 

  1. Evaluate

To reap the benefits in future, you have to evaluate the nitty-gritty of the company, analyse the annual reports from the past four-five years and see the trend. Is their profit growing? Are they acquiring assets? Do their assets value more than liabilities or vice versa? All these questions as a value investor will bring you profits in the future as you understand the company’s trends and why it is undervalued. 

Do your research on:

  • Its long term plans 
  • It’s business policies 
  • Financial structure and reports 
  • The team- Managing director, CEO, CFO, other members 
  1. Invest 

You found the company, evaluated the annual reports, and found the undervalued share, well its time to invest in the stock. Don’t put all your eggs in one basket, but  invest and make the share a part of your portfolio for the long term. Patience is the key to value investing. 

Value investing is not for everyone. To some, it might feel like a slower option to earning, but there is wisdom behind the idiom “slow and steady wins the race”. As a value investor, this should be your motto: to earn profits, a steady income, and low risk. 

For excelling in value investing you need to have strong research and regular updates about the stock market. What if you can have access to stock market updates in 50 words with just one click?

Best finance information app – the FlipItNews App is all set to revolutionise the way Indians perceive finance, business and capital market investment.  FlipItNews launched “Circle”- a community of smart investors. A smart platform where any fin-tech company can build its community. 

Feature Circle provides you with the opportunity to learn from market advisers, fin-tech companies, wealth advisors etc and engage yourself with other users through group discussion, polls and quizzes. Also, earn flipitcoin for every action.

Download the best app for finance –  FlipItNews App now and get stock market latest news in Hindi too. Join Circle to become a part of the biggest investment network.

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Finance

Spot Gold Trading: Things to Know

Trading spot gold is as simple as selling and buying gold at a spot price. Nut there is no existence of brokers or market makers in spot gold trading. Traders can buy or sell directly among themselves on an online platform. Fractional amounts of gold coins, ingots or bars can be sold in spot gold trading. This very thing makes this an affordable option for even small investors. One can venture into the world of spot gold by following a few steps. 

Opening an account

There are companies that offer spot gold trading option. The very first thing to do is to open an account with such a company. Check the credibility before submitting all the paper works. Try not to choose companies that trade gold using exchange traded funds or gold funds. When you open the account with your selected company, ask for a demo account. Do your own job and learn the things that can be done on the platform. If there are any questions you need to ask, make sure to contact the customer care representative. While choosing the company, it is necessary to look for their customer service. You might need their help quite a few times during your stint. 

The ask price and bid

The ask price and bid are two different but major things in spot gold trading. The bid price is the one with which you buy the gold. The ask price is the amount for which you sell your gold. The amount of spot gold varies a bit from city to city. Make sure t choose the city and then go for bid and ask price. Make good use of your demo account. Buy gold when you think the price will ultimately rise. Sell it if it feels like the price is going down. Keep doing trade until your losing trades are outnumbered by your winning ones. 

Start trading

Ones you gain enough knowledge and confidence to start trading, it is time to fund the account. Then you can just go on to trade spot gold (เทรดทองคำ, term in Thai) and earn. Make sure to keep a record of all your transaction for future tax records. 

The benefits of spot gold trading

Spot gold is something that assures both buyers and sellers of the gold they are buying or selling. The platform provides a place for a price discovery mechanism that is transparent. This process is beneficial for an organized market that is comprised of formal and authorized players across the chain of gold value. It might encourage the unorganized traders and jewelers to get integrated in the formal system. Spot gold trading might become able to get rid of the unorganized sector. There are also options like gold ETFs which enable one to get different options to invest in gold than owing it physically. 

There are things to know and learn about spot gold trading. Putting the right bid at the right time is the key to success. It will be easier to deal in this sector with better understanding gained through proper training.

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