Lately, I have been trying my hands on stock market. Being one of the fastest growing economy arpund the world, the Indian stock exchange is doing well. The sensex have surged to new high and doubled many people investment. Equity investment has always been a lucrative way of creating wealth. The stock market can be lucrative for a number of reasons. Investors can benefit from capital gains when a company's stock grows in value over time. Companies pay dividends to shareholders as their profits increase. In earlier times, many people use stock investments to save for retirement. Stocks have historically outperformed other asset classes over the long term. However, the performance of individual stocks varies over time. Emerging markets have the potential for higher returns, but also have higher risk.
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There are number of stocks listed on the stock market. An investors needs to do a throrough research before putting their money. We cannot expect every stocks to fair well. While the scope of returns are higher on large cap funds. The situation is alwsys risky when it comes to i vesting in Mid-cap and small cap. But in recent trends these two funds have the ability to perform better in the market. Many companies have proven multibagger which makes rhe investor money doiblednor trippled in shorter period of time.
When it comes to investing, a professional investor alwsys stidy the market and do fair amount of research on the company profile. There are multiple ways to analyze the stock market, including fundamental analysis and technical analysis:
Fundamental analysis: This method examines a company's financial statements and economic indicators to determine its intrinsic value and potential for growth. Fundamental analysis helps investors understand a company's financial health and future prospects. It's often used to evaluate long-term investments.
Technical analysis: This method uses historical market data to predict future price movements. Technical analysis focuses on statistical trends in trading activity, such as price movements and volume. It's often used for short-term investment strategies, such as active trading.
Some basic things to consider when analyzing stocks include: Researching the company's industry, Understanding the company's management, and Evaluating the company's prospects. Many investors use a combination of fundamental and technical analysis to make informed decisions.
C.A.N.S.L.I.M
While doing some study intonthe different analysis model, I found CANSLIM method of stock analysis. William O'Neil, the founder of Investor's Business Daily, developed the CANSLIM strategy. It was considered one of the top stock market strategies from 1998 to 2009.
CANSLIM is a stock-screening technique and investment strategy that helps identify strong performing growth stocks. It is actually an acronym that stands for seven key characteristics to look for in a company:
C: Current quarterly earnings. It is imporrsnt to know how the companynis performing in recent times.
A: Annual earnings growth, which should be up at least 25% over the last three years. The average helps to identify the growth potential of the company.
N: New products or services. This simply implies ifbthe company is introducing any new concept and technique into their business.
S: Supply and demand. The very basic criteris which determine the company performance.
L: Leader or laggard in its industry.
I: The amount of Institutional sponsorship, such as ownership by mutual funds, banks, and other large institutions.
M: Market direction, how the market is fairing innthe economy. It basically relates to the bull or beer in the market.
The CANSLIM strategy uses both technical and fundamental analysis to identify stocks with high growth potential. It's tuned towards bull markets and uptrending markets, and it's not recommended to use it in a bearish or falling market. There are alwsys certain pros and cons. While the CANSLIM strategy can make you a lot of money quickly, it can also cause you to lose a lot of money quickly if the market goes the wrong way. Anyway this is very old modal of Researching. Withbthe passage of time and technology , we have many new modals to do our own analysis. I think I get hold of ofnit sooner.
Peace!!
Namaste @steemflow
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