How can I learn share market?
This is the most important questions most of my fellows ask me. hence I would say that there is lot of point you should remember .
- Read books.
- Follow a mentor.
- Take online courses.
- Get expert advice.
- Analyse the market.
- Open a demat and trading account.
- The Intelligent Investor
- Common Stocks and Uncommon Profits
- The Warren Buffet Way
- Learn to Earn
- Stock Investing For Dummies
Introducing some of the web’s top stock trading teachers & mentors
- Robert Prechter. …
- Toshko Raychev. …
- Lan Turner. …
- “Superman” Paul Scolardi. …
- Timothy Sykes. …
- Jason Bond. …
- Kavan Klein. …
- William John Bell.
Some of company have there own expert whose blog / website helps
- Tata Motors
- HDFC Bank
A common method to analyzing a stock is studying its price-to-earnings ratio. You calculate the P/E ratio by dividing the stock’s market value per share by its earnings per share. To determine the value of a stock, investors compare a stock’s P/E ratio to those of its competitors and industry standards.
May be you not understand above statement so here i will help you
For example, if a stock paid an annual dividend of Rs 22 and the current market price is Rs 440, the dividend yield of the stock is 5 per cent. So, what does dividend yield tell about the future price of a stock?
If the dividend yield is low, the share price is relatively higher than the dividend paid and hence the stock may be overvalued. This indicates a possible decline in the future.
A high dividend yield, on the other hand, means subdued interest in the stock and that the company is trying to woo investors by paying higher dividends. It means the stock price is undervalued.
This can be extended to a stock index too. One can calculate the aggregate dividend yield of an index, compare it with past dividend yields and see if the current yield is low or high. A low dividend yield indicates an overpriced market and vice versa.
Let’s demonstrate it by a simple calculation. According to the National Stock Exchange data, the average dividend yield of the Nifty in the last couple of months has been around 1.5 per cent. On 2 November 2011, the Nifty closed at 5,263. The current dividend yield is Rs 79.
If analysts expect Nifty companies to increase their dividend payouts by 10 per cent every year for the next three years and investors expect at least a 4 percentage point premium (12.5 per cent) on equity returns over the risk-free 91-day Treasury bill rate, which is currently 8.5 per cent, then,
Expected dividend=current dividend x 1.1
Present value=Expected dividend/(1.125)
The expected dividend in the 4th year will be (105.15 x 1.1)=Rs 115.66
The value of the index at the end of the 3rd year (Terminal Value)=105.15/(.125-0.1)=4,206
The present value of the terminal value=4,206/1.125=3,739
The present value of the index is the sum of the present value of dividend paid during the three years and the present value of the terminal index value
Hence, at its present value (5,263), the Nifty is overvalued and may fall in the immediate future.
Opening a demat account is really easy. One needs to ensure that they select the right depository participant and fill the opening form in time. The same could be explained in four easy steps as follows:
Select the Depository Participant (DP)>> Fill up an account opening form>> In-Person Verification>>Pay Account Maintenance Fees
- Step 1. First select where you want to open a Demat Account and then select the Depository Participant you want to open demat account with. Most brokerages and financial institutions offer the service.
- Step 2. Then fill up an account opening form and submit along with copies of the required documents and a passport-sized photograph. You also need to have a PAN card. Also carry the original documents for verification.
- Step 3. You will be provided with a copy of the rules and regulations, the terms of the agreement and the charges that you will incur.
- Step 4. During the process, an In-Person Verification would be carried out. A member of the DP’s staff would contact you to check the details provided in the account opening form.
- Step 5. Once the application is processed, the DP will provide you with a demat account number and a client ID. You can use the details to access your demat account online.
- Step 6. As a demat account holder, you would need to pay some fees like the annual maintenance fee levied for maintenance of the demat account and the transaction fee — levied for debiting securities to and from the account on a monthly basis. These fees differ from every service provider (called a Depository Participant or DP). While some DPs charge a flat fee per transaction, others peg the fee to the transaction value, and are subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). In addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa.
- Step 7. Minimum shares: A demat account can be opened with no balance of shares. It also does not require that a minimum balance be maintained.
To open a demat account, you need to submit proofs of identity and address along with a passport size photograph and the account opening form. Only photocopies of the documents are required for submission, but originals are also required for verification.
Here is a broad list of documents that can be used as proofs for demat account opening:
PROOF OF IDENTITY
PAN card, voter’s ID, passport, driver’s license, bank attestation, IT returns, electricity bill, telephone bill, ID cards with applicant’s photo issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities, or professional bodies such as ICAI, ICWAI, ICSI, bar council etc.
PROOF OF ADDRESS
Ration card, passport, voter ID card, driving license, bank passbook or bank statement, verified copies of electricity bills, residence telephone bills, leave and license agreement or agreement for sale, self-declaration by High Court or Supreme Court judges, identity card or a document with address issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities and professional bodies such as ICAI, ICWAI, Bar Council etc.