Stock Investing: The Formula and Approach for a Better Understanding

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When questioned about the stock market, the majority of individuals indicate they are aware of it, but their responses are unclear. Even chartered accountants, businessmen, and so-called MBAs from reputable companies use brokers rather than investing directly. Many people are looking for big returns from the market in the short term. The market, on the other hand, does not operate in the same way. To benefit from the market, all we need to do is be an open learners and grasp the market condition from a long-term perspective. Apart from the fundamentals of investing, studying trends, the SENSEX, current events, and geopolitics are also critical.

So, if you think you don't know much about the stock market, don't be concerned. When it comes to stock buying, many people say things like "I bought the stock on the advice of a friend, or I purchased stocks based on a broker's recommendation, or I grabbed stocks based on news on television." Is it true that a stock market is a gambling place?

Hows and Whens are Important

Is it not possible to buy and sell the stock with own effort? It's certainly possible. All it needs is a solid foundation. When learning something new, we must set aside our preconceived notions and approach the process with an open mind. Have a thorough knowledge of the stock market.

The stock market has provided tremendous returns to investors in the long run. Leman Brothers, the United States' largest financial institution, declared bankruptcy in 2008. This was followed by the Indian Satyam scandal. The SENSEX fell from 17,000 to 8,000 points as a result of the global financial crisis of 2008 and the Satyam scandal. The market rebounded in 2014 when the country had a majority and a stable government.

The SENSEX reached 25,000 points in 2014. SENSEX, which had crossed the 35,000 mark by 2018, crossed the 40,000-point border in February 2020. However, the stock market index fell by 25,000 points in March 2020 as the number of COVID-19 cases worldwide grew. Many fell into disrepair, and investors withdrew their money. However, the SENSEX later surpassed the 50,000 mark.

When we look back at history, we can see that stock market investing is a methodical process. There's no doubting that a stock market is a place where people can make money.

In the short term, there is a risk, but in the long run, there is a benefit.

Stock market investment is not dangerous in the long run, but investing in a stockbroker with a short-term profit motivation carries a significant risk. The Bombay Stock Exchange index was under 5,000 points in 1991. The index has already surpassed the all-time high of 50,000 points. Is this to say that the stock market has never fallen? There has undoubtedly been some decline. However, all of these ups and downs are just temporary.