How to double your investment in the stock market – Nadeem Moulvi
By: Nadeem Moulvi, Director
M.M. Securities Pvt. Limited
How can you start working with Rs20,000 only and turn it into Rs40,000? You buy stock of a publicly limited company as do hundreds of other investors like you. A share of a company is floated in the market after determination of its value. After being issued in the market the share may trade above or below its par value. If the company performs well, people start to buy shares which push the share volume and as the volume grow, short term investors buy and sell which gives an impression to the people that it is profitable to buy the shares of the company whose share price is changing rapidly and creeping towards a high end. In this way the short term investors go for quick buy and sell with a high risk of loss and profit but in contrast a long term investor has to wait as the prices go up gradually but with a low risk of loss.
The broker loses, if a person invests for a long term, but comparatively on a short term investment the broker makes a profit. A good broker is one who works in line with the trend of the market, so investor has to be very careful before investing in the market. A share must be bought at a price in which we can modestly expect both the upward and the downward price of the share. Most of the people only see the upward trend and when the price falls, they start to sell in panic and make a big loss but those people who buy with careful understanding that price can go up and down as well, they never panic or sell their shares at loss, instead they wait for the share to come in the profit range and thus they stand to gain on it.
There is no magic to know what will be the upside or the downside of the share. It is all based on the past performances and future expectations of the company. Sometimes the performance is good but the public expectation is not there, so the shares take a low dip but as the time goes by and performance starts picking up, the expectation changes and the share price also starts to rise. Sometimes both the performance and market expectation is good but the company has incurred bad debts or liabilities that gives shock to share and you lose money but when the bad debts and liabilities are relieved off the balance sheet, you make money so profit and loss is always there but a good broker will always watch the company performance in all aspects and will guide you when to enter and exit the market.
The Rs20,000 you invested will turn into a loss if you do not research well, therefore in order to make Rs40,000, you must buy the right share. As there is no short cut to double your investment, so it is advised to make long term investment. Just remember why most of the Banks invest in share market to make money and share with their clients. When you can make money yourself so why give big chunk of your profit to banks and end up with small profit.
By writing this article, I have guided you, now it is up to you how you make money. I get delighted when my investors reap profits as I grow with them that’s the reason that I am honest with them and I never want my customers to lose.