Thursday, December 27, 2012

Large-cap Stocks

Stocks of the largest companies in the market such as Tata, Reliance, ICICI are classified as large-cap stocks. Being established enterprises, they have at their disposal large reserves of cash to exploit new business opportunities. The sheer volume of large-cap stocks does not let them grow as rapidly as smaller capitalized companies and the smaller stocks tend to outperform them over time. Investors, however gain the advantages of reaping relatively higher dividends compared to small- and mid-cap stocks while also ensuring the long-term preservation of their capital.

Saturday, December 22, 2012

Mid-Cap Stocks

Mid-cap stocks are typically stocks of medium-sized companies. These are stocks of well-known companies, recognized as seasoned players in the market. They offer you the double advantages of acquiring stocks with good growth potential as well as the stability of a larger company. Generally companies that have a market Capitalization in the range of 250-4000 crores are mid cap stocks

Mid-cap stocks also include companies that show steady growth backed by a good track record. They are like blue-chip stocks (which are large-cap stocks) but lack the size of those companies. These stocks tend to grow well over the long term.

Tuesday, December 18, 2012

Small-cap Stocks

The stocks of small companies that have the potential to grow rapidly are classified as small-cap stocks. These stocks are the best option for an investor who wishes to generate significant gains in the long run; as long he does not require current dividends and can withstand price volatility. Generally companies that have a market Capitalization in the range of up to 250 Corores are small cap stocks.

These companies are relatively new. It is difficult to predict how they will perform in the market. Being small enterprises, growth spurts dramatically affect their values and revenues, sending prices soaring.
On the other hand, the stocks of these companies tend to be volatile and may decline dramatically.

Most Initial Public Offerings (IPO) are for small-cap companies. Aggressive mutual funds are also enthusiastic about adding small-cap stocks in their portfolios. Because they have the advantage of being highly growth oriented, small-cap stocks can forego paying dividends to investors, which enables the profits earned to be reinvested for future growth.

Wednesday, December 12, 2012

Fix Deposits by Companies ... 3


  1. Variety of Deposit Scheme to Suit individual needs.
  2. Reasonable Return
  3. Liquidity
  4. Moderate Safety
  5. Good Service & Response


  1. Deposits are unsecured.

Wednesday, December 5, 2012

Fix Deposits by Companies ... 2

Differences between Manufacturing companies and Finance companies,

Manufacturing Companies:
  1. Manufacturing Companies are permitted to mobilize deposits from the Public up to 25% of their net worth and up to 10% from their Share Holders.
  2. They can accept deposits for a Minimum Period of 6 Months and a Maximum of period of 36 Months.
  3. Interest will be paid on Monthly, Quarterly, Half-yearly, Annually & on Maturity. (cumulative).
  4. Investor can withdraw the deposits before the maturity. In this case he gets the interest till date, but less penalty which is usually 1% or 2 %
 Finance Companies:
  1. Finance Companies are permitted to accept deposits based on their credit rating issued by any of the agencies like CARE, ICRA,CRISIL and FITCH.
  2. They can accept deposits for a minimum period of 12 months and a maximum period of 60 months.
  3. Interest will be paid on monthly, quarterly, half-yearly, Annually & on maturity. (cumulative).
  4. Deposits with highest /high rating companies are safe. They may offer an Interest rate between 9 % & 11%.
  5. Investors can avail a loan up to 75% of the amount invested and also allowed Premature withdrawal.

Saturday, November 24, 2012

Fix Deposits by Companies .... 1

Fixed Deposits mobilized by companies are governed by the provision of Section 58-A of the Companies Act 1956. The Fixed Income instrument provides Fixed/committed return on the amount invested and is the most convenient investment options to all investors. Fixed Deposits can be classified into deposits received from,

  1. Manufacturing Companies ( Non Banking-Non Finance Companies)
  2. Non Banking Finance Companies (NBFC)

Points to consider before choosing companies:

  • Go for the company which is in operation for at least 10 years.
  • The company should be a Public limited/Government company.
  • The company should be a prior maturity and dividend paying company.
  • Check out the management of the company, it should be known and well established management.
  • Do go through track record of the company.
  • And last but not the least, in fact most important check out rate of interest offered by the company.

Monday, November 12, 2012

Tax Structure in India

Qus. : What are you doing?
Ans. : Business.

2) Qus. : What are you doing in Business?
Ans. : Selling the Goods.

3) Qus. : From where are you getting Goods?
Ans. : From other State/Abroad

4) Qus. : What are you getting in Selling Goods?
Ans. : Profit.

Qus. : How do you distribute profit ?
Ans : By way of dividend
Tax : Pay dividend distribution Tax

5) Qus... : Where you Manufacturing the Goods?
Ans. : Factory.

6) Qus. : Do you have Office / Warehouse/ Factory?
Ans. : Yes

7) Qus. : Do you have Staff?
Ans. : Yes

8) Qus. : Doing business in Millions?
Ans. : Yes
Ans : No
Tax : Then pay Minimum Alternate Tax

9) Qus. : Are you taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary.

10) Qus.: Where are you taking your client for Lunch & Dinner?
Ans. : Hotel

11) Qus.: Are you going Out of Station for Business?
Ans. : Yes

12) Qus.: Have you taken or given any Service/s?
Ans. : Yes

13) Qus.: How come you got such a Big Amount?
Ans. : Gift on birthday.

14) Qus.: Do you have any Wealth?
Ans. : Yes

15) Qus.: To reduce Tension, for entertainment, where are you going?
Ans. : Cinema or Resort.

16) Qus.: Have you purchased House?
Ans. : Yes

17) Qus.: How you Travel?
Ans. : Bus

18) Qus.: Any Additional Tax?
Ans. : Yes

19) Qus.: Delayed any time Paying Any Tax?
Ans. : Yes

20) INDIAN :: can I die now ??
Ans :: Wait, we are about to launch the funeral tax!!! 

Sunday, October 21, 2012

Invest in the direction of the Trend!

The fastest way to make money in the market and that too in most risk free way is to identify a change of trend in the market as early as possible. Take your position, ride the trend and close your position shortly after the trend reverses.

Any market professional will tell you that it is impossible to buy at the lows and sell at the highs or sell at the highs and buy at the lows consistently. But that's the fun part, you always need to be alert and aware.

Tuesday, October 2, 2012

Stock Charts

Stock charts gained popularity in the late 19th Century from the writings of Charles H. Dow in the Wall Street Journal. His comments, later known as "Dow Theory". His theory says that markets move in all kinds of measurable trends and that these trends could be deciphered and predicted in the price movement seen on all charts.

A stock chart is a simple two-axis (x-y) plotted graph of price and time. Each individual equity, market and index listed on a public exchange has a chart that illustrates this movement of price over time. Individual data plots for charts can be made using the CLOSING price for each day. The plots are connected together in a single line, creating the graph. Also, a combination of the OPENING, CLOSING, HIGH and/or LOW prices for that market session can be used for the data plots. This second type of data is called a PRICE BAR. Individual price bars are then overlaid onto the graph, creating a dense visual display of stock movement.

Stock charts can be drawn in two different ways. An ARITHMETIC chart has equal vertical distances between each unit of price. A LOGARITHMIC chart is a percentage growth chart. It has equal vertical distances between the same percentages of price growth. For example, a price movement from 10 to 20 is a 100% move. A move from 20 to 40 is also a 100% move. For this reason, the vertical distance from 10 to 20 and the vertical distance from 20 to 40 will be identical on a logarithmic chart.

Stock chart analysis can be applied equally to individual stocks and major indices. Analysts use their technical research on index charts to decide whether the current market is a BULL MARKET or a BEAR MARKET. On individual charts, investors and traders can learn the same thing about their favorite companies.

Sunday, September 9, 2012

Primary and Secondary Markets

Primary Market: Primary Market is the means by which companies float shares to the general public in an Initial Public Offering to raise capital. An Issuer/Company enters the Primary markets to raise capital. They issues new securities in Exchange for cash from an investor. If the Issuer is selling securities for the first time, these are referred to as Initial Public Offers (IPO's).

Secondary Markets: Once new securities have been sold in the Primary Market, an efficient mechanism must exist for their resale, if investors are to view securities as attractive opportunities. Secondary Market transactions are referred to those transactions where one investor buys shares from another investor at the prevailing market price or at whatever price both the buyer and seller agree upon. The Secondary Market or the Stock Exchanges are regulated by the regulatory authority. In India, the Secondary and Primary Markets are governed by the Security and Exchange Board of India (SEBI).

Wednesday, August 29, 2012

Investing in Bonds

  • Bonds give higher interest rates compared to short-term investments.
  • Bonds are less risky when compared to stocks.

  • Selling bonds before they're due, may result in a loss, known as a discount.
  • If the issuer of the bond declares bankruptcy, you may lose your money. Hence you must critically evaluate the credibility of the issuer of the bond, ensuring that he has the capability to repay the bond amount.

Thursday, August 16, 2012


Investing lets your money earn some more money, thus getting it to work harder for you. In effect, your savings do not sit idle, but help you profit from them. As the cost of living keeps increasing and every day expenses keeps rising, investing lets you keep up with these changing market conditions. Investing small amounts of money over a period of time brings you closer to your financial goals.

You can stay invested, even by saving small portions of money on a monthly basis. Thus, the first successful investment decision, is the decision to start saving. Investing is a lifelong activity; you need to keep investing regularly.

Thursday, August 2, 2012

Swing Trading .... 4

Up Trend: Simply put an uptrend is a series of higher highs and higher lows. In other words, an uptrend is a series of successive rallies that extend though previous high points, interrupted by declines which terminate above the low point of the preceding sell-off. Often the high of the last "swing" in the trend will serve as support for the next low. These areas are circled.

Down Trend: Simply put a downtrend is a series of lower highs and lower lows. In other words, a downtrend is a series of successive declines that extend though previous low points, interrupted by increases which terminate below the high point of the preceding rally. Often the low of the last "swing" in the stock's trend will serve as resistance for the next high. These are circled.

Long Swing Trades: Once an uptrend has been identified a swing trader looks for buying opportunities in that stock. This can be identified when the stock experiences a minor pullback or correction within that uptrend. The swing trader then activates a trailing buy-stop technique. If prices break out above the trailing stop loss, you will be stopped out and long in the trade. If prices decline, your buy-stop will not be touched.

Short Swing Trades: Once an downtrend has been identified a swing trader looks for selling opportunities in that stock. This can be identified when the stock experiences a minor rally within that downtrend. The swing trader then activates a trailing sell-stop technique. If prices break down and fall below the trailing stop loss, you will be stopped out on the short side. If prices rally, your sell-stop will not be touched.

Wednesday, June 27, 2012

Swing Trading .. 3

  1. Swing Trading combines the best of two worlds -- the slower pace of investing and the increased potential gains of day trading.
  2. Swing Trading works well for part-time traders — especially those doing it while at work. While day traders typically have to stay glued to their computers for hours at a time, feverishly watching minute-to-minute changes in quotes, swing trading doesn't require that type of focus and dedication.
  3. While Day Traders gamble on stocks popping or falling by fractions of points, Swing Traders try to ride "swings" in the market. Swing Traders buy fewer stocks and aim for bigger gains, they pay lower brokerage and, theoretically, have a better chance of earning larger gains.
  4. With day trading, the only person getting rich is the broker. "Swing traders go for the meat of the move while a day trader just gets scraps." Furthermore, to swing trade, you don't need sophisticated computer hook-ups or lightning quick execution services and you don't have to play extremely volatile stocks.

Tuesday, June 19, 2012

Swing Trading ... 2

  • The basic strategy of Swing Trading is to jump into a strongly trending stock after its period of consolidation or correction is complete.
  • Strongly trending stocks often make a quick move after completing its correction which one can profit from.
  • One then sells the stock after 2 to 7 days for a 5-25% move. This process can be repeated over and over again. One can also play the short side by shorting stocks that fall through support levels.
  • In brief a Swing Trader's goal is to make money by capturing the quick moves that stocks make in their life span, and at the same time controlling their risk by proper money management techniques. 

Saturday, June 9, 2012

Swing Trading

What is swing Trading? To be honest, I was baffled too when I first heard the term. Swing Trading takes advantage of brief price swings in strongly trending stocks to ride the momentum in the direction of the trend. Swing trading combines the best of two worlds - the slower pace of investing and the increased potential gains of day trading. Swing traders hold stocks for days or weeks playing the general upward or downward trends.

Swing Trading is not high-speed day trading. Some people call it momentum investing, because you only hold positions that are making major moves. By rolling your money over rapidly through short term gains you can quickly build up your equity.

Saturday, June 2, 2012

Fixed Deposit Account

A fixed deposit account allows you to deposit your money for a set period of time, thereby earning you a higher rate of interest in return than a savings bank account. Any individuals and organizations with the intention of retaining their savings for a fixed period for some future use can have this account.

You can withdraw the deposit at any time before maturity without any difficulty. You can avail loans upto 85% of the principal. There are variable deposit periods ranging from 6 months to 120 months available.

The minimum deposit amount is Rs. 1,000/- and deposits can be made in multiples of Rs. 100/-.

Thursday, May 24, 2012

Stock Exchange

Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks and other securities. The members may act either as agents for their customers, or as principals for their own accounts.

Stock exchanges also facilitate for the issue and redemption of securities and other financial instruments including the payment of income and dividends. The record keeping is central but trade is linked to such physical place because modern markets are computerized. The trade on an exchange is only by members and stock broker do have a seat on the exchange.

Sunday, May 13, 2012

Investment Bank

Investment Bank is a financial intermediary that performs a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.
Unlike commercial banks and retail banks, investment banks do not take deposits. There are two main lines of business in investment banking. Trading securities for cash or for other securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is the "sell side", while dealing with pension funds, mutual funds, hedge funds, and the investing public (who consume the products and services of the sell-side in order to maximize their return on investment) constitutes the "buy side". Many firms have buy and sell side components.
The role of the investment bank begins with pre-underwriting counseling and continues after the distribution of securities in the form of advice.
Investment Banker is a person representing a financial institution that is in the business of raising capital for corporations and municipalities.

Friday, March 30, 2012