Markets are typically linked with betting. In several towns, the lane in which the futures markets are found, be it for commodities or stocks, is known as Satta bazaar ‚, and those connected with it, labelled as gamblers. This is the reason why only over 2,000,000 folk take part in secondary markets and about 30,000,000 out of a 100-crore population hold shares. Elders and grandparents will sometimes offer cautionary words of information to those wanting to enter any activity in relation to share markets. In reality there had been a point when it was tricky to get a matrimonial coalition for somebody experimenting in stocks and shares.

Let us so understand the difference between betting and speculating. Some of the favored betting avenues are : gambling on cricket, football or horse-racing, the result of an event ,eg a lotto, casino games, or an easy toss of a coin. These events don’t have a risk part : that is, cricket is a sport that’ll be enjoyed regardless of who wins. At the very best if the home side loses, the bunch may get displeased. A viewer won’t lose money, only watching the game. But if he gambles on the results of the game by putting down his capital, a risk component gets made. Hence there’s no risk as such with the event, but gambling imputes the chance.

Now let us look at share investments. When we have money, there is always risk — of devaluation due to inflation if we keep the money idle, of it being nicked or spent by near and dear ones, of making an investment in low-return options, which we term loss of opportunity ‚. Therefore , by investing the money, we are attempting to minimise the chance already present and get a higher return by identifying better-income avenues. There’s no creation of risk.

The volatility in the markets is also a reason cited for relating to shares an untrustworthy type of investment. Folks mention that markets fluctuate each day, and that stupidity and fear of loss of capital hold them back. But volatility should be looked on as a possibility. If the market isn’t fluctuating, there’d be no opportunity to earn income. When the market goes up, there’s the chance to sell, and when it comes down, the chance to buy.

The other debate of speculators is : I buy high and sell low and lose cash all of the time. In order to earn income on the market there must be a long term engagement with the markets. Generally folks who say that they acquired high and sold low are those that enter the market at the top of a bull run because they feel ostracised when this is building up. Right after, they’re left with high-priced stocks, patience runs out and they get rid of them at whatever price they get and take sanyas ‚ from the market. It’s necessary to be continually in contact with the markets to appreciate their swings and roundabouts and ride the wave to earn money.

The markets are unpredictable also due to operator activity and price rigging, a characteristic of betting, say disillusioned speculators. But there will be unattractive elements in every market. We’ve got to outline our area of operation and guard ourselves against such hazards, which can on occasion be done by limiting our activity to An and B1 group stocks only which are liquid, and not subject to manipulation. Going in for low capital and T2T items has a higher chance of price increase, together with the appended possibility of these being subject to price control. These shares have a low capital base ; therefore, it takes little money to rig the prices in the required direction. After each bull run financiers are stuck with stocks that have no liquidity, company addresses that are untraceable and other associated reasons that render the share meaningless. This occurs because stocks are not purchased on merit but on rumors of operator activity.

A special of exit levels vis desired returns and stop loss levels would also help the financier guard against capital depreciation beyond a planned level.

To conclude, fiscal planning is an absolute must for each family. It involves building up a portfolio of investments in varied instruments that not only meet your requirements of money liquidity but also acts as an earning partner. For we erroneously say that we are the only earning members of the family while ignoring the contribution that smart investments can make in sharing the load. A bit of time dedicated to monetary planning can cut back the burden multifold. Understanding the acceptability of each avenue in the right point of view can go a good way in augmenting the returns on your portfolio.

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