WHY STOCKS ARE BETTER INVESTMENT TOOLS?

Do you know there are many investment options such as stocks, bonds, real estate etc. available in market to invest? But over long term if you invest wisely in stocks, it can give you handsome results. I have always preferred stocks as a better investment as compared to other investment tools. Well, the reason you should also invest in stocks are many but i will explain some of them so that you can also be aware from these benefits. 
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Capital: Investing in stocks is much easy and you can start with a very little capital but you can't invest in real estate unless you have got a large capital. Nowadays, online stock investing has changed the whole process. You only need to open a demat account (we will talk about this later ) and with few clicks you have done your work. but in case of real estate it is a very long process to buy the property.

liquidity: liquidity simply means how easy you can convert your assets or investments to cash. Stocks are most liquid investment, you can buy or sell stocks online just in a few clicks but real estate is least liquid of all because it may take few days or even months to sell your property and add cash to your pocket. But stocks can be sold whenever you want.

Taxes: Another aspect to consider when deciding to invest in real estate or the stock market is taxes. If you own property, you will be required to pay property taxes every quarter, based on the assessed value as determined by the city or country. This is included in your mortgage payment. Whether you want to flip the property or hold onto it as a landlord, you will also have to pay tax on the sale or rental proceeds.

There are certain tax benefits unique to owning real estate as a landlord, however. The interest expense on your mortgage is tax deductible, along with operating expenses, property taxes, insurance and depreciation. Exactly how much you can deduct will likely depend on the rental income. In most situations, under the passive activity loss rules, you cannot write off deductions that are more than the rental income, which would generate a loss. Working with a CPA can be very helpful, particularly when investment properties or multiple residences are involved.

Stocks have tax consequences as well; first, you are required to pay a capital gains tax on any profits you made from selling stock. Furthermore, even without a sale, you are also required to pay a tax on any dividends you receive.

Return comparisons: here below is the chart for return from various assets class.
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Risk: In stock investing you can always calculate your risk bearing capacity and can take action accordingly. Historical data, companies financials data etc. can be a great tool analyzing risks. However, in real estate you also have historical data of rents and increase in property rate but according to me here you don't have that much of control.

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Now, i guess you all know why i prefer stocks as a better investment tool rather than real estate.







WHAT IS AN INDEX?

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According to investopedia –
An index is an indicator or measure of something, and in finance, it typically refers to a statistical measure of change in a securities market. In the case of financial markets, stock and bond market indices consist of an imaginary portfolio of securities representing a particular market or a portion of it.

In simple terms an index is a barometer to check whether the stock market as a whole or the economy of any country is on positive side or being negative. I guess, you must have heard of people saying like “today the market is up or today the market is down”. Well, they mean how the index is doing? Generally, index and markets are used interchangeably in stock market. And nasdaq, dow jonmes, shanghai, dax,cac, sensex and nifty50 are all examples of popular stock market indexes all over the world. beside these indexes there are many indexes which represent only one type of industry so that investors can determine whether they have to invest in that particular industry or not. If the index of that industry is doing well , they will invest their money otherwise they will find another .
Some important indexes in India:
  • BSE SENSEX
  • NIFTY 50
  • CNX NIFTY JUNIOR
  • S&P CNX 500

SOME IMPORTANT USE OF INDEX:
  • They help us to find the broad trend in the market by keeping track of the whole market.
  • Can be used as a benchmark to evaluate the investor’s portfolio.
  • Allocate the funds rationally among stocks.
  • Helps in comparison of returns.
  • Acts as a basis of index fund.

HOW A COMPANY IS SELECTED TO BE LISTED ON INDEX?
The selection criteria of a company to be listed on a index depends on various factors such as :
  • MARKET CAPITALIZATION
  • LIQUIDITY
  • VOLUME etc.













STOCK EXCHANGES

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Hello, In this post we will learn what is stock exchange and what is their role in capital market or you can say stock market?

WHAT IS STOCK EXCHANGE?
According to wikipedia "A stock exchange is an exchange where stock brokers, traders and investors can buy or sell stocks(also called shares), bonds and other securities."

Now as above definition of what an stock exchange is you can simply assume that stock exchanges work just like your near market where you buy some food and other items. For every thing you buy there is a seller who sells the products( in stock exchanges products are stocks,bonds and other securities).

ROLE OF STOCK EXCHANGES
Now as we know what is an stock exchange is , next question generally asked is what is their roles?

So, stock exchanges play many roles in the economy of any country like they help businesses to raise funds through I.P.O.(Initial Public Offer) and are medium to create investments and trading opportunities among us.Exchanges play third party role for every trade that occurs between buyer and seller to make transparency.

MAJOR STOCK EXCHANGES IN INDIA

The major stock exchanges in India are:
  • BSE( Bombay Stock Exchange)
  • NSE(National Stock Exchange)
  • MCX(Multi Commodity Stock Exchange Of India)
  • NCDEX(National Commodity And Derivative Exchange)


Stock Market Belief.



Hi there!
In this post stocklearner will guide you to how to start trading or investing successfully. All you have to do is dedicatedly learning from every post in upcoming days. Learning is the key to take control of your finances, and I’ll always be here to guide you throughout your journey.

Is stock market a gambling?   
The first question everyone ask if you ask them to invest or trade in the market is “ Is stock market a giant casino or like playing poker where you have a very little probability of winning ” ?

Now, I know that many people are afraid to invest or trade in market because they have listened how someone they know loose all his fortune in stock market and they become bankrupt. Well, I also have listened the same from my friends and family and they even told me to leave the stock market. But from my experience I can say that this is a popular myth among us.

According to me stock market performs a very crucial role in financial development of any country. If the people of a country take part in the stock market the country will grow financially. Now since people don’t have proper knowledge to invest in the market, they make a very big loss and even some of them go bankrupt. And therefore they tell other people not to invest in the market.

That’s how fear is spread among novice trader. But seriously let me ask you a simple question “ What it need to be successful in any field of life” ? Well, The answer is thirst of knowledge, practice and dedication. A doctor earns its degree by hard practice and learning over a long time. But in stock market people come with great expectations and they don’t want to learn anything. They only want shortcut to get rich quick. They go for searching some tips from various sources like brokers, advisors or a tip provider (I got so many calls from Bangalore who provide tips) or buy-sell software nowadays. These all software and tip providers make false promises and the person who got trapped in these get loss in trading or investment. And they never learn from their mistakes instead they blame stock market     
     .
Hence, Our goal here at stocklearner is to learn how anyone can trade or invest profitably in the markets. Keep visiting to us. Wish you a very bright future.

Welcome to the world of stock market.

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INTRODUCTION

This is the first post of this blog. In this blog we gonna learn about stock market from very basic to advanced.
i'll try to teach you technical analysis and fundamental analysis from scratch. so if you are totally new in stock market and want to trade or invest in the market and you don't know what is stock market and how it works then this is the end of your search.