How to analyze a Stock Market. Stock Market news and tips.

How to Analyze a Stock Market???

Hello investors, in this post you will learn how to analyze a stock market before investing in any company. All the aspects, all the fundamentals and all the key points of investing. And you will also become an expert in picking a stock for long term investing.

This post is for all of you, who want to invest in the stock market, but before investing, they often get entangled in the question that how to analyze the stock market?

By reading this post, you will understand very well how to analyze the stock market.


Stock analyzing is the part of investing where you can learn how to study a company, its aspects, product management, service, quality, EPS [Earnings Per Share] and liquidity status.

It helps you to get the information about the company so that you can earn maximum profit by investing in it.

To analyze the stock market, you have to buy the stocks of the company listed in the stock market, and you cannot go to the direct stock market to buy or sell any stock.

You need a stockbroker to buy and sell any shares. It is through stockbroker that you can buy and sell any shares from the stock market.

A stockbroker is an important link that allows the investor to reach the stock market.


1. Learn the basics of the stock market

2. You also understand the investment goals behind investing in the stock market,

3. Understand your ability to bear the risk of investment in the stock market

4. Prepare your own investment style and strategy

5. You must understand the real value of the stock with the help of Fundamental

6. Choose a stockbroker that will give you better service at a lower fee

7. You buy the stock of the company whose business you understand,

8. Treat the stock market like a business

9. Control emotions while investing in the stock market

10. Regularly monitor the stocks you have invested in

11. Understand and follow Stop Loss

12. Understand money management and risk and rewards and make better use of it,


1. Business and Prospects of the company: Before investing in the shares of the company, it is important to see what the business of the company is and what its prospects are in the future. Apart from this, it is important to look at the old performance of the company. From this, the company's growth expectation can be estimated.

Do not chase stocks that have given manifold returns earlier. Correct research is necessary before investing. G Chokkalingam, founder of Economics Research and Advisory, says that new investors fail in chasing stocks that give manifold returns.

2. Differentiation in Business Model: Many times the product or business model of the company will be different. But if they match the rivals of that company, then it is important that there is some newness or difference in this model.

This is one thing that distinguishes the company from its rivals.

Apart from this, it is important to emphasize the company's business cycle, diversity etc. According to Vinod Nair, head of research, Geojit Financial Services, a diversified business is favourable for investment.

3. Keep an eye on profits: Statistics like net profit, the revenue of the company must be examined and understood before deciding to invest. Also, before placing bets on the company, be sure to look at its annual and quarterly results. Keep a long-term view of investing in stocks.

4. Look at the quality of management: The growth of the company depends largely on its management. Excellent operation in limited means shows its merit and opportunity. It is better to invest money on management skills than playing bets on well-known management.

5. Look at the debt/equity ratio: This ratio is very important because it makes it easy to understand how much debt a company has compared to shareholders. If this ratio is low, then the risk of investing in the company is also considered low.

6. See the valuation: It is decided on the basis of the valuation whether a stock is expensive or cheap. This scale increases or decreases the attractiveness of a stock's prices. Companies are marked overvalue or undervalue compared to their competitors.

The most popular method for this is PE (Price / Earnings) ratio. This is slightly different for banks. PB (price-to-book) ratio is considered better for bank shares. For capital-based companies, EV / EBIDTA ratio is preferred.

7. Keep yourself under control: When you get excited about any good or bad news about a company, avoid getting excited or frustrated. According to Chokkalingam, do not decide to invest only on the basis of what is going on in the market. Once you have bought and sold the stock, you will not be able to change it. So keep your homework done. Let go of such 'occasions', which are visible on the basis of rumours. Good stocks definitely give good returns.

Hope after reading this post, you will be able to understand how to invest in the stock market.

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