New investor should know in stock market . Invest means long term. He has thought that short time invest in stock market than he doesn’t make a profit in shock market. In Stock market invest is long time and risk is low. Short term invest profit is poor and risk is high.
New invest in stock market : BO Account
Fist time investor invest the stock market he was must open the BO account in Broker House which have license under security exchange commission. At present requirement papers are needed to open the BO account as follows:
1.Application form which fixed the CDL ( Central Depository Limited ) 2. Two pcs passport size color photo ( back side of photo applicant name and signature ) 3. Two pcs color passport size photo of nominee ( back side of photo nominee name and signature ) 4. NID card photocopy both applicant and nominee.
Shares Buy and sell
There are three words in stock market a) Buy b) Hold and c ) Sell. When, which share , what is price you buy, how many days you hold in shares and when, what is price you sell shares & make a profit. This is a main rule of investment. Investors should buy share in low price or buy near bottom line of Good Company’s for some weeks/months/years and target price sell in proper time investor get profit definitely. When stock market index day by day decrease than many investors afraid share price will more low rate and sell the shares. For the reason no of seller increase and price is more low this time is called sell out of fear. During the time investor brave with buy the good company’s shares after he will sell highest price and get a high profit. Selected company’s daily share price and quantity investor see graphical picture than he can probably assume price high or low. Gradually primary stage of high price can will buy of shares and sell before the highest price to get a profit.
Which company’s fundamental analysis is good than investor can buy companies shares? For example:
i.Capital US$ 5,00,000 a) Face Value US$ 10
ii. Total No of Shares 50,000 Nos b) 2018 year after tax profit US$ 1,000,000
iii. Market Price (27-10-19 ) US$ 300 c) 2018 year Dividend paid 40 %
|Earnings Per Share =||Total Profit||= US$ 1,000,000||= US$ 20|
|No of Share||= 50,000|
Per Share Income US$ 20. Analysis of 3 or 5 years Companies Per Share Income investor assume how much Income in future which share profit is high than his market price is high.
|Price Earnings Ratio =||Market Price||= US$ 300||= 15 times|
|Per Share Income||= US$ 20|
It means, per share income US$ 20 per year. Investor invest per share US$ 300. Return to US$ 300 investor will need 15 years. For this reason, there are many good companies which have PER is low this companies share more profit.
|Per share Dividend Income||Total Capital x 30 %||= US$ 5,00,000 x 30%||= US$ 1,50,000||= US$3|
|No of Shares||= 50,000||= 50,000|
Companies per Share Income are US$ 20 but Dividend declared US$ 3 rest of the amount US$ 17 companies not declared so that, likes this companies more possibility in future more dividend declared. That’s why this companies share long time buy to get a high profit.
|Dividend eld||Per share Dividend Income||= US$ 3||= 1%|
|Market Price||= US$ 300|
Companies per share income US$ 20 and dividend declared US$3. Investor buy this companies shares price is US$ 300, question it, how much profit this investor? Answer it, profit is US$ 0.01. Which are investors think about dividend income they should select which companies are dividend eld is high. Have will remember that, share market price will more high between companies normally income than dividend eld more low.