ow to monitor your stock portfolio COVER

How to Monitor Your Stock Portfolio?

How to monitor your stock portfolio?

Hola Investors. Today I am going to teach how can monitor your stock portfolio in an easy and effective way.

First, let me clarify that in this post we are going to learn how to monitor the performances of the holding stock in your portfolio.

We are not going to discuss how to track your profits or how much money you have made from the market. There are a number of financial websites and apps that you can use to track your profits or losses.

Here we are going to discuss how to monitor the performance of the holding stocks. How is the company doing? Is the company’s performance improving or declining?

This post has nothing to do with the stock price movement, but to monitor the company’s performance and growth.

As creating a good stock portfolio is important, similarly, it’s equally important to monitor the performance of the holding stocks in your portfolio.

Quick Tips:

There are few tips that I would like to give you first before we start discussing how to monitor your stock portfolio. They are:

1. You do not need to check the stock prices daily:

Until you are involved in Intraday trading, checking the stock price daily won’t help you much. It’s a lot easier and stress-free if you do not check the prices of your stocks daily.

2. Moreover, do not calculate your net profit/loss daily:

The stock market is dynamic and the stock prices change every second. And hence, there is again no use to check your net profit/loss daily.

3. ‘Buy & hold’ is old:

If too much involvement is wrong, in the same way, extra ignorance towards your stocks is also bad. Do not trust blindly on your holding companies. ‘Buy and hold’ strategy has few loopholes and you need to monitor even your best performing stock.

4. Look at unexpected changes:

If there is a drastic rise/fall in the price of any of your holding stock, then you need to investigate the reason behind it.

Now that you have understood the quick tips, lets us study how to monitor your stock portfolio.

How to monitor your stock portfolio?

1. Read the important news about the company:

Keep updated with the latest happenings of the company and the industry. There are a number of factors that can affect the company which can be both domestic (government norms, taxes, duties etc) and international (Currency exchange rates, crude oil, war scenarios etc).

To keep updated with the news you can set google alerts for the companies in your portfolio. All the news related to the company will be directly sent to your email inbox.

Learn how to set google alerts here.

Further, you can also read important news on few financial websites like money control and screener if you create your portfolio on it. These sites will notify you about the news regarding the company.

Also read: 7 Best Stock Market Apps that Makes Stock Research 10x Easier.

2. Check the quarterly results of the company:

Every company in India releases its results quarterly i.e. 4 times in a year. Typically, a company releases its results within 45 days after the end of every quarter (March/June/September/December).

Study the quarterly results of the company in your portfolio. If the results are good, then enjoy. However, if the result is bad, then do not get influenced by the loss of the company in just one quarter. In any business, there will be losses sometimes. What matters is the consistency. Nevertheless, if the company is continuously giving bad results, then you need to reconsider about the stock.

3. Read the annual results:

Company’s annual reports are the best way to evaluate its performance. Using the annual reports, you can compare the company’s performance with its past to check its growth. You can also read the company’s future plans and strategy in the annual result.

Also read: How to do Fundamental Analysis on Stocks?

4. Keep an eye on Corporate announcements:

Read the corporate announcements to remain updated with corporate actions of the company like new acquisition, merger, appointment or resignation of senior management etc. This information can also be found on the company’s website.

5. Monitor the shareholding patterns:

You also need to check the shareholding pattern of the company, mainly the promoters shareholdings.

An increase in the shares of the promoters is a healthy sign. Promoters are the owners of the company and they have the best knowledge of the company. If they are confident about its future growth, they are usually correct.

However, if the shareholding of the promoters is continuously declining, then it’s a bad sign. Investigate further why the promoters are selling their stake.

Besides, do not get afraid if mutual funds, FII, DII are buying/selling the stocks. They buy the stocks on the availability of funds.

Related post: 7 Must Know Websites for Indian Stock Market Investors.

6. Check the promoter’s pledge of shares:

Promoters pledge of share is always a sign of caution. If the pledging is continuously increasing, then be aware. You can check the promoter’s pledge of share on the company’s website.

Although it takes few efforts and time to continuously monitor the stocks in your portfolio, however, it’s worthwhile doing it.

Nevertheless, if you have less number of stocks in your portfolio, say 8-10, then it won’t take much time to monitor your portfolio.

Moreover, the Google alerts and mobile app notifications have made the life of investor lot easier. You can read most of the news and information on your mobile without much effort now.

If you are new to investing and want to learn stock market from scratch, here’s an amazing course for the beginners: INVESTING IN STOCKS- THE COMPLETE COURSE FOR BEGINNERS.

That’s all. I hope this post on how to track your stock portfolio is useful to the readers.

If you have any doubts, do comment below. I reply every one of them.

Tags: How to monitor your stock portfolio, how to monitor stock performance, how to track your stocks, portfolio monitoring, how to monitor your investment portfolio
SENSEX IN LAST 30 YEARS

75x Returns by Sensex in last 30 Years of Performance.

75x Returns by Sensex in last 30 Years of Performance:

Hi Investors. Today I have brought an interesting insight for the investors. We are going to discuss the Sensex performance in the last 30 years. So, let’s get started.

SENSEX IN LAST 30 YEARS:

Here is the data of Sensex for the last 30 years.

YEAR SENSEX (Closing Pts) 
1987 442
1997 3,658
2007 20,286
2017 33,573

You can get this data from BSE India website using this link.

Here is the chart of Sensex in last 30 years till date.

Sensex in last 30 years of performance

Chart Source: https://tradingeconomics.com/india/stock-market

From the above data, you can notice that Sensex has given multifold returns in the last 30 years. From a mark of 442 in 1987, Sensex is currently at an all-time high with 33,573 points (November 2017).

The BSE index has given an astonishing return of 75 times in its last 30 years.

In short, an investment of 10 lakhs in the BSE Index fund 30 years back, would have turned out to be 7.5 crores by now.

Note: If we compare this return with 4% p.a. returns from the savings account, we will get just 22 lakhs net amount in 30 years.

Overall, Sensex has turned out to be a wealth creator for those who invested in the market in time. Those who invested even in the index fund of Sensex in last 30 years, would have been sitting on a huge pile of wealth in the age of their retirement.

Nevertheless, those who missed this rally should not be disappointed and should invest in the market on suitable opportunities.

Moreover, they should invest actively by becoming an investor rather than a trader or side walker (short-term investor).

Currently, the market is at an all-time high. However, this should not stop the investors from investing in SIPs even if there might be a correction in the market in near future.

Also read: SIP or Lump sum – Which one is better?

Invest for the long term as it has always turned out to be a wealth creator for most of the investors. Long-term investments tend to reward its investors eventually.

For a short term, there will always be fluctuations in the market. If we study the last financial year 2016-17, we can notice that there were a couple of swings in the market due to multiple reasons like demonetization, US Presidential election, Implementation of GST etc.

If you invest for the short term, there will be volatility due to the domestic or global factors.

However, for the long term, bulls become in charge if you have invested in the fundamentally right stock.

Also read: 10 Must Read Books For Stock Market Investors.

India is growing at a very decent pace and in the next 3-5 years it will turn out to be a rising star in the world. I am highly optimistic about the growth of the Indian economy and suggests the investors remain invested in the market for long term.

There is a famous quote used by Motilal Oswal Group that I would like to quote here:

Buy Right, Sit Tight.

Also read: How To Invest Rs 10,000 In India for High Returns?

That’s all for this post about past performance of Sensex in last 30 years. I hope this insight is helpful to the investors.

Do comment below what are your expectations from Sensex in the upcoming year of 2018?

Why Most Indians do not Invest in stocks

#9 Reasons Why Most Indians do not Invest in stocks.

#9 Reasons why most Indians do not invest in stocks:

Hi Investors. Today we are going to discuss why there is less participation of common people in Indian stock market. So, let’s get started!!

I was recently talking with one of my friend, Gaurav who works in a big multinational company. Gaurav didn’t know that nifty has reached its all-time high this Tuesday until I told him so.

Later same day during lunch, when I informed one of my colleagues, Ashish, that nifty has crossed 10k points, he didn’t show any sign of excitement or interest.

In reality, most Indians are like Gaurav and Ashish. They have little or next to zero knowledge/information of stock market.

When Mr. Narendra Modi became the prime minister of India in may 2014, the whole India including the stock market, seemed to roar. The NSE index nifty has given an astonishing return of over 42% since coming of PM Modi in the central government.

Although the stock market has welcomed our PM with a bullish trend, however, it didn’t seem to motivate the participation of common people in the market as much as anticipated.

In India, around 98% population has nothing invested in the stock market. Hardly 2% population of Indians invests in the market with the majority of only two states: Gujarat & Maharastra, out of 29 states.

Related post: Majority of states have very few stock market investors 

If we compare the participation of the common people in stock market around the world, we can find that India’s participation percentage is even below the average. In China, around 10% population of the common people participates in the stock market. Further, in the USA, this percentage is as high as 18%.

Nevertheless, what really worries about the participation of the Indian investors in the market is its minimal growth. The percentage of investors participating in the market currently, is same as 2 decades earlier (in the 1990s). The governing bodies have not been able to attract more retail investors to invest in equity market.

Even in 2017, stock market investing is considered as the rich guy’s games. Most of the retailers who invest in stocks are bankers, businessmen, engineers, lawyers etc, whose average monthly income are in six figures.

Indian stock market is over 140 years old and still, people are searching for reasons that why most Indians do not invest in stocks.

In this post, I’m going to give 9 common reasons why most Indians do not invest in stocks. Make sure that none is stopping you from investing in the Indian stock market.

Further, please mention in the comment box which reason you think is mostly responsible for less participation of common people in Indian stock market.

9 Reasons why most Indians do not invest in stocks.

1. Lack of awareness:

unawareness

Many of the people are unaware towards stock investing. They do not know how much returns they can get by investing in stock market.

A common villager doesn’t know how to earn from stocks and doesn’t understand the power of compounding.

A local retail shop owner does not know what is a demat and trading account.

An old small town electrician hasn’t ever met an investor or trader in his entire life.

This is all because of lack of awareness. In short, unawareness is one of the biggest reasons why most Indians do not invest in stocks.

2. Common Investing myths in India:

MYTHS VS FACTS

Since childhood, everyone hears about how his uncle/cousin/neighbor etc who has lost his entire fortune in the stock market. Stock market investing is considered as gambling in India.

Many people do not invest in the market because they follow the famous investing myths prevailing in the society.

Few of the famous stock market myths which stops a common person from investing in stocks are:

  • Investors who invest on their own are intelligently gifted.
  • Paying a profession is better than making your own investing decisions
  • Investing on your own is very risky etc.

Related post: 7 Most Common Stock Investing Myths.

These myths are the biggest barrier to common people and stock market and a reason why most Indians do not invest in stocks.

New to stock market? Here is an amazing book on Indian stock market for beginners which I highly recommend to read: How to Avoid Loss and Earn Consistently in the Stock Market by Prasenjit Paul.

3. Not willing to take the risk:

risks stock market

The risk is always involved in stock market no matter how many studies you have done and how fundamentally strong the company is. Most of the conservative Indians are not willing to take a risk on their hard earned money and considers 4% return from the savings account as safe. They will only invest if they are assured that their investment is 100% risk-free, which stock market never is. The risks involved in the market stops these people from investing in stocks.

Also read: Is Indian stock market Risky to Invest?

However, one always has to take some risks in order to get some reward. Remember- ‘No Risk, no reward’. Further, there is a famous quote by Warren Buffett that I would like to quote here:

‘Stock market investing is about minimising risks, not avoiding it.’

4. Lack of knowledge/guidance:

lack of knowledge

There is also a segment of people who are willing to invest in stock market but are unable to invest because of lack of knowledge or proper guidance.

They do not know where to start. There is no proper platform for these people to learn about stock market investing. Lack of knowledge stops these segments of people from investing in the Indian stock market.

5. No security in exchanges:

There are a number of past scams in the market. The Indian stock market has got a bad name due to scandals like that of Harshad Mehta and Ketan Parekh.

An Even big company like ‘SATYAM’ was involved in frauds and looting their investors.

Although after coming to SEBI (Securities exchange board of India), these scams numbers have reduced. However, there are still many fraudsters present in the Indian market who tends to make money by cheating innocent investors.

Because of the lack of proper securities in the market, many common people tend to stay away from the market. And this is one of the key reason why most Indians do not invest in stocks.

Also read: 3 Most Common Scams in Indian Stock Market That You Should be Aware of.

6. No proper courses:

There are very few dedicated courses on the stock market. Although NSE and BSE provide few certificate courses, that’s not even close to fulfilling the requirements of the interested aspirants.

Even many MBA, BBA, or BCOM degrees don’t have proper courses on investing/trading.

Ready to start your stock market journey? Check out our amazing course for newbie investors: INVESTING IN STOCKS- THE COMPLETE COURSE FOR BEGINNERS

7. Lack of capital:

In 2012, the Indian government stated that 22% of Indian population is below its official poverty limit. The latest poverty line is targeted at Rs 32 in villages, Rs 47 in cities. Read more here.

When a majority of the population are struggling to meet even the basic needs of life, there it’s logical that the percentage of people with surplus cash to invest will be low. Lack of capital is a major reason why most Indians do not invest in stocks.

8. Unwillingness:

“I don’t have time” – a common statement among the 9-to-5 working people in India, unwilling to take charge of their financial future.

A majority of the population are either too busy in their day job or are ignorant towards investing. They always delay investing in the market, considering they will do so in future. This unwillingness or laziness among the people is a big reason for less participation of Indians in the stock market.

9. Preference towards physical assets like land, gold etc:

People still have a love for gold, lands, FDs etc. Many people consider investing in Real Estate, gold etc easier in India compared to paper assets, as this has been traditionally followed.

Investing in a land in your village, or buying gold jewelry form your local jeweler shop seems simple compared to opening a trading account which will further require the access to internet, computers etc. The natural tendency of Indians towards physicals assets is a big rationale for poor participation in the stock market.

Additional Reasons:

There are many people who enter the market just to try their luck. Once these people lose money in stocks, they practically leave the market forever. These inappropriate ways of investing reduce the total number of active investors/traders in India.

Although, there are few other reasons also like lack of accessibility, low earning of people, volatility etc, however, the main points are covered in the post.

Also read: 6 Reasons Why Most People Lose Money in Stock Market

That’s all. I hope this post on ‘#9 Reasons why most Indians do not invest in stocks’ is useful to the readers.

Further, if there is any other reason which is stopping you from investing in Indian stock market, do comment below.

Invest smart, Invest long.

Fundamental vs Technical Analysis of Stocks cover

Fundamental vs Technical Analysis of Stocks

Fundamental vs Technical Analysis of Stocks in Indian stock market:

There are two common approaches to pick a stock. The first is fundamental analysis and the second is technical analysis. However, fundamental analysis and technical analysis follow a completely different route to pick stocks.

Both fundamental analysis and technical analysis can be used to determine if an investment in stock is attractive or not and to further forecast the future trends of stocks.

For example, if you are evaluating 10 stocks and want to determine which one you should purchase, then you can use either of fundamental vs technical analysis of stocks.

Fundamental analysis checks how healthy the company is compared to its competitors and economy. It studies everything related to the company like its financial statements (Balance sheet, profit loss statement etc), management, competitors, products, economy, industry etc.

Related Post: How to do Fundamental Analysis on Stocks?

On the other hand, technical analysis does not care about the financials or the industry. It evaluates the company based on past trends, prices & volumes. Technical analysts use stock charts to identify future trends and patterns.

technical analysis

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What is the Intrinsic Value of a company?

“The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.” – Investopedia

In short, the Intrinsic value is the true value of a company.

Fundamental analysts believe that the current stock price of a company may or may not be same as its intrinsic value.

They evaluate companies to find which one is trading below its true intrinsic value using different studies like financial statements analysis, stock valuation, economy analysis etc.

Once they find a company which is trading below its intrinsic value (also considered as undervalued stock), they hold this stock until it reaches its true value. A stock trading below its intrinsic value is considered a good investment opportunity.

Overall, the approach followed in fundamental analysis is to find the intrinsic value of stocks.

If you want to learn fundamental analysis from scratch, I would highly recommend you to read this best selling book- ‘The Intelligent Investor’ by Benjamin Graham. Warren Buffett considers it as the best book ever written on investing.

On the other hand, Technical analysts believe that there is no use to analyze companies intrinsic value as the stock price already reflects all relevant info.

They do not care about the financials of a stock. They predict the future performance of a stock based on its past stock price trends.

If you want to study more about the technical analysis approach, here is a great book to start- ‘A random walk down wall street’ by Burton Malkiel.

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Fundamental vs Technical Analysis of Stocks: Basic Comparisons

Now that we have little understanding of both fundamental vs technical analysis of stocks, let us discuss both there methodologies in details.

Here, we will compare fundamental vs technical analysis of stocks based on different criteria.

1. Basic Principle:

Fundamental analysis analyses all the factors that can affect the stock price of a company in the future like financials, management, industry etc. It evaluates the intrinsic value of the company to find whether the stock is under-priced or over-priced.

Technical analysis reads the past charts, patterns and trends of the stocks to predict its future price movement.

If you want to study value investing for Indian stock market, here is an amazing book which I personally recommend you to read: Value investing and behaviourial finance- Insights into Indian stock market realities by Parag Parikh.

2. Time Frame:

Fundamental analysis approach is used for long-term investments.
Technical analysis approach is used for short-term investments.

3. Data Sources:

Fundamental analysis gathers data from financial statements of the company along with other economic news sources.

Technical analysis gathers data from the stock charts.

4. Indicators:

Fundamental analysis studies assets, liabilities, earnings, expenses etc. It also uses various fundamental indicators like PE ratio, PB ratio, debt/equity ratio, ROE etc

Technical analysis uses charts like candle sticks, price data etc. Various technical indicators that are commonly used are MACD, Simple moving average, EMA, RSI etc.

Also read: The Fundamentals of Stock Market- Must Know Terms

5. Methodology Used:

Fundamental analysis studies the financial data like balance sheet, profit and loss statements and cash flow statements. It also examines other factors while evaluating stocks like competitors, company’s management, industry, economy etc. Fundamental analysis focuses on both past performance and future potential.

Technical analysis studies the market movement and public psychology. It is mostly the analysis of the past price movements of the stock. Technical analysis focuses on the performance chart and the trends of the stock.

6. Strategy:

Fundamental analysis is used to find the intrinsic value of the company to evaluate whether the stock is over priced or under priced.

Technical analysis is used to find the right entry and exit time from the stock.

New to stock market? Check out the upcoming course on ‘How to pick winning stocks?’ here.

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Fundamental Analysis- Pros and Cons:

PROS:

  • Fundamental analysis invests for the long-term and their returns are quite huge. Power of compounding is applied to the long-term investments resulting in good returns to the investors.
  • They invest in financially sound companies which is always a good approach.

CONS:

  • Fundamental analysis is quite laborious and its methodology is lengthy & complex.
  • There is no clear time frame for long term investment.
  • As the future potential of the company is considered in the fundamental analysis, various assumptions are made in this approach.
  • As the entry & exit time is not specified in fundamental analysis, you might buy a good stock at a bad time.

fundamental vs technical analysis of stocks

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Technical Analysis- Pros and Cons:

PROS:

  • Technical analysis is fast and the outcomes can be seen quite early.
  • This approach is comparatively less laborious.
  • Entry and exit time for the stock can be specified.
  • Technical indicators readily give buy or sell indication.

CONS:

  • As there are a number of technical indicators, it’s tough to select a good indicator.
  • As technical indicators do not study the financials, you might be investing in a financial unhealthy company.
  • Technical analysis skill requires a lot of accuracy, reliability, and discipline.

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Can fundamental and technical analysis be used together?

Yes, fundamental analysis and technical analysis can be used together. Many investors/traders use both the approaches. It makes sense to enter in a fundamentally strong company at a right time. While fundamental analysis helps to find a healthy company to invest, technical analysis tells you the right time to enter or exit that stock.

In short, you can use both fundamental and technical analysis of a stock together.

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Conclusion:

Fundamental vs Technical analysis of stocks, both are effective yet quite different methodologies used for research of potentially strong stocks.

It’s really tough to say which one is the better way of investing. Although a number of books have been written on both fundamental and technical analysis, however this debate on the better way of investing is still going on.

My suggestion is to do your own study and make your investing strategy based on your knowledge, preference and time.

Do comment below which investment strategy you follow- Fundamental analysis or Technical analysis.

Also read: How To Invest Rs 10,000 In India for High Returns?

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