Union Life Insurance Company held its 5th Annual General Meeting (AGM) for the fiscal year 2077-78 on Magh 26, 2079, under the leadership of its Board of Directors, Mr. Sandeep Kumar Agrawal. According to the media statement, the AGM approved the financial reports for the previous fiscal year and decided on the remuneration of its auditor as well as the meeting allowances for its BoDs.
Finance companies are licensed by the central bank with the goal of providing various banking and financial services to the general public, as the reach of banking and financial services in Nepal remains limited.
For the year 2022, NEPSE currently has 15 listed finance companies. To assist enthusiasts in the secondary market, an article has been prepared that compiles an analysis of all finance companies’ performance in the second quarter of FY 2079/2080 that can be useful for investment purposes. The industry average includes all 15 finance firms.
Have you decided to invest in the stock market? Consider these 7 stock market investing tips when making your investments.
1. Have a solid comprehension of basic economic principals.
Before you get started, you should understand basic principals and laws of economics. The stock market closely follows the law of supply and demand. For example, when there is a large demand for the stock of a certain company, the cost of its stock will increase along with the demand. However, if there are more stock available for sale than there are buyers, the unit price of that company stock will decrease.
2. Learn about prospective companies you want to invest in.
Do your homework before you invest in prospective companies. Read the company annual report and find out about their products, operations, services and basic business track record. This information gives you an idea of how stable the company is and whether they can deliver on their promise to offer profits to investors.
3. Select companies with staying power.
There are so many companies that exist in today’s stock market, selecting becomes a major decision for beginning investors. Relatively stable companies and business are owned by the government, unless there is a political revolution or crisis going on. Gasoline companies and telecommunications companies are usually profitable and stable because there is a constant demand for their services and products. While IT companies are rapidly growing in today’s stock market, there are so many of them it may be a challenge to check their profiles to exercise reasonable care before investing. Before putting your money into an IT company, verify their track record and make sure they are stable and profitable for a minimum of 10 years.
4. Keep an eye on the news.
Guesswork is completely ineffective when it comes to investing in the stock market. Good intuition and solid decision-making come from learning about global and local news both politically and economically. When you watch the news, make sure to keep track of the industry your company is in. Even stable companies may go bankrupt or have a major blow that will bring them down.
5. Don’t put all your eggs in one basket.
Avoid investing in just one company and spread out your stock investments to several businesses. When you have stock concentrated in just one company, you have a greater chance of losing it all. When you spread out your investments over several companies, those earning profits can cushion the ones that not not as profitable.
6. Stockbrokers aren’t the final word.
A stock broker is actually gambling with your money so you need to do your own homework. Dishonest brokers can take advantage of investors who do not fully comprehend how the stock market works.
7. Greed is your enemy.
While everyone is eager to make profits in the stock market, an investor loses their sense of reason when they are fueled by greed. A money hungry investor may forget to check on economic rumors and spontaneously decide to sell or buy with the thought of making major profits and then lose it all.
Putting your money in the stock market can of course be risky, but the above stock market investing tips should help point you in the right direction.
For those who are unfamiliar with the domaining business, it entails buying, selling, developing, and monetizing domain names. It is, in fact, a BIG business with the potential to earn you a million dollars. You may not believe me, but when you consider that AsSeenOnTv.com was sold for $5.1 million, Autos.com was sold for $2.2 million, Express.com was sold for $1.8 million, and so on.
It’s a million-dollar business, but it’s not just about big names; expert domainers frequently make $10,000 or $100,000 on unknown domains as well. With so many new domain name extensions entering the market and so many businesses closing down and abandoning premium domain names on a daily basis, the industry is constantly growing. This expansion brings with it an ever-increasing potential for success, but it also brings with it a slew of new challenges.
This article will go over a few important checklist items to think about when starting a domaining business from scratch.
Yes, money is required to start a domaining business, and it can range between $100 and $100,000. Successful domainers typically own a large number of domains to build their portfolio, but you can begin with a small number. A lot depends on the business model you choose, and your financial needs will vary accordingly.
To be honest, you don’t need any specific skills, but you should be eager to learn, gain experience, and grow. The best way to learn about domaining is to do it yourself. To be successful in your domaining business, you will need experience, which you will gain through experimentation and learning from relevant domaining resources such as Purely Space. Never close the doors to learning, and you will find success!
In reality, no business is risk-free, and domaining business is no exception. You must be aware of the various types of risks associated with the domaining business, such as domain marketplace scams, the value of.com names (or other top-level domains) decreasing for various reasons, typosquatting popular companies can result in a lawsuit from the company, and so on. Domaininvesting.com has correctly described the five types of risks associated with the domaining business.
Every business has ethical and unethical ways to make money, and the domaining business has some unethical ways to make money as well. It is critical to be aware of and avoid these bad habits. The following business models should be avoided:
If you are serious about getting into the domaining business, the best option is to go the legal route, which is both risk-free and highly rewarding. Here are some of the most successful domaining business models.
Make sure to choose the right business model before you begin your domaining venture. Take some time to learn about all of the different business models and then select the one that suits you best. Experienced domainers run multiple business models at the same time, but as a newcomer, it’s best to start with a single direction.
Before we get into how to become an investor in Nepal, it’s important to understand who an investor is. An investor is someone who puts money into something with the hope of profiting in the future. A return is the benefit derived from such an investment. Investors are always on the lookout for high-yielding investment opportunities.
Based on a book written by Robert Kiyosaki Rich Dad Poor Dad, people can be divided into four distinct categories in terms of generating income. They are:
1. Employee (Salary-based) are those who work for others in order to meet their needs. They are paid at the end of the month for their work. Job holders are included in this category. Employees benefit from security because they know they will be paid at the end of the month. The main disadvantage of being an employee is the lack of freedom.
2. Self-employed are individuals who work for themselves. They have more freedom than salaried employees, but they must work like salaried employees to meet their demands.
3. Businessmen are the owners of the company Business owners hire others to work for them. They create products and services in order to make money.
4. Investors invest in businesses and stocks for profit.
According to the book, in order to become wealthy, you must be either a businessman or an investor, or both.
Not all of your money can be considered an investment. There are a few factors that distinguish between spending and investing. The following are the two most important characteristics that every investor should possess:
The principal is your machine, which can print money for you. It is in your best interest to keep your machine in good working order. When you lose your principal, you can’t make money off of it. As a result, the safety of the principal should be your top priority.
When you put your money into a good business, you get something in return. Your return can take the form of cash, shares, or stocks. What you should remember is that your principal earns you some level of return. You should not expect a return on your investment that is exponential or even out of the realm of possibility. Investing with a non-realistic expectation of return is gambling. Never put your principal at risk. It is all you have.
Inflation is a term used to describe the gradual decline in the purchasing power of money. A popular saying goes, “A dollar today is worth more than a dollar tomorrow.” As an investor, you have the ability to outperform inflation and keep your money’s value constant. You should always keep an eye on inflation and strive to outperform it. Your investment return should always be greater than your country’s inflation rate.
It is yet another advantage of being an investor. You can own as many and as varied businesses as you want. What you should have are some investing principles that you can use before you start investing. After you’ve established your investing principle, the world is yours to explore.
There are three main popular fields of investing in Nepal. They are:
Real estate is and has always been the best investment opportunity. Real estate investment generates income from two sources: renting and selling real estate. It can be both active and passive investment. You can actively buy and sell properties, or you can simply invest in real estate and let time do the work of calculating your income. You can always expect your property’s value to rise over time. In the meantime, you can use the money you earn from renting to cover your day-to-day expenses.
Banks in Nepal offer competitive interest rates on fixed deposit savings. You can protect your principal by using fixed-deposit schemes offered by commercial banks or development banks in Nepal. While cooperative companies in Nepal have high rates of return, they have a bad reputation for fraud or scams. It is not a good idea to put all of your money in cooperatives.
In Nepal, there is also peer-to-peer lending. It pays a higher interest rate on your money than institutions, but it also carries a higher risk.
Interest-bearing deposits are one of the best passive income ideas in Nepal, regardless of where you choose to invest.
Nepal Stock Exchange (NEPSE) is the country’s sole stock exchange. If you are new to this, you can read the NEPSE beginner’s guide. Investing in stocks provides you with two significant benefits. You can be a shareholder in any company you want, and you will receive an annual return. Alternatively, you can sell your stocks if the price rises. Stock investing, like real estate investing, allows you to be either an active trader or a passive investor. Stock investing can begin with as little as 100 rupees. Stocks could be the next best small business in Nepal for you.
Furthermore, the best investment you can make is in yourself. Always seek to broaden your knowledge. Read books, websites, and news to stay current. One thing that all of the best investors have in common is that they are voracious readers. As the saying goes, the more you learn, the more you earn.
It is not easy to become an investor. To become a good investor in Nepal and other countries, a certain set of principles and hard work are required. However, it is not as difficult as learning rocket science. Anyone can become a good investor with careful planning and dedication. There are a few things you should never forget and a few things you should never forget. Best wishes for your investment.
Alright, so you’ve decided you want to take a shot at buying and trading stocks. The only problem is, you really don’t know how. Where should you begin? And do you even know what a stock is and the significance of stock for companies?
This article will serve as a dummies guide for trading and buying stock.
A stock is actually partial ownership of a company. Some companies consider stocks as certificates so the more stock a person owns of the company, the larger portion of the company they own. Along with owning a bigger part of the company, they also have greater influence in running the company. This influence is referred to as equity investment.
There are other important terms you should become familiar with before getting into the stock market. Get to know about leverage, price-earnings ratio, earnings per share, margins and options before you dive in and invest your hard-earned money.
Next you need to figure out where and how to purchase those stocks. Basically, there is only one way to buy shares and stocks. Through your stock broker.
Online exchanges let investors have access to stocks from all around the globe. Without the need for a broker, investors can purchase and sell stocks online. Some banks also give you the ability to set up your own stock portfolio. You can use the money you have invested with these banks to purchase and sell stocks online right away.
Brokers render brokerage services and they are the middlemen who do the work on your behalf. Brokers give advice, research the current stock market and buy and sell stocks in accordance with the requests of their clients. From buying and selling these stocks, the brokers earn a commission.
When you decide on how you prefer to purchase and sell stocks, you need to open an account. Exchanges will allow you to monitor and control your individual stock portfolio yourself. If you decide to enter into the stock trade with a bank, discuss the specifics of setting up your own account with the bank you choose. For conducting trades through a broker, you need to find a reputable broker to deal with and then ask them to open and manage your account.
Once you set up an account successfully, start studying the stock market to plan your strategy. Do you want to be conservative when making investments? Do you like to aggressively invest? How many investing years do you have? Are you a day trader or will you be investing on a long term basis?
When you determine your personal plan, do your research on the current stocks offered in the market. If you have a broker, it becomes easier because they do much of the research for you. However, it is still best to study the market on your own.
Remember, the stock market is a volatile place so be ready for explosive activity when trading and buying stocks. Like life, there are many ups and downs before you reach your goals.
The covid19 pandemic is not only putting millions of people’s lives in peril, but it is also devastating the global economy. Our government has proclaimed general vacations and imposed a travel ban on the general public in order to combat the spread of Coronavirus. Nobody knows how long it will take for things to return to normal. Meanwhile, some huge organizations are downsizing their workforces, while small and mid-sized businesses are being forced to lay off employees. As a result, a large number of people are losing their employment or their salary. At this vital juncture, we’ll highlight several quarantine income opportunities, both online and offline. Keep reading to learn how you can make money during the lockdown!
If you are a graphic designer with experience utilizing popular graphic tools such as Adobe Photoshop and/or Adobe Illustrator, you can get hired online and earn big money. Graphic designers are hired by many overseas platforms to work on little to large projects including logo design, business card design, banner design, brochure design, and so on. Here are some job vacancies in distribution.
https://www.freelancer.com/jobs/graphic-design/
https://www.behance.net/joblist
https://99designs.com
https://www.upwork.com/ab/find-work
Do you like to use social media sites like Facebook, Twitter, and Instagram from time to time? Why don’t you complement your income with those sources? Any online social media channel that allows you to generate links or followers can be utilized to promote a product (made by another company). You may easily earn an affiliate fee if a viewer purchases your offered goods through your provided link. A variety of local businesses offer affiliation programs as well. Let’s have a look at some options.
https://www.daraz.com.np/wow/i/np/help-pages/daraz-affiliate-program
Affiliate marketing is a safe and secure way to earn money online. More people are choosing to affiliate marketing as a full-time career because of the attractive affiliate commission arrangements given by numerous companies. If you have good writing and/or video-making talents, as well as some SEO knowledge, you may generate a consistent income conducting affiliate marketing on your blog or YouTube. Take a peek at some of the various international affiliation channels.
https://affiliate-program.amazon.com/
http://www.cj.com/
https://shareasale.com/
Earn a comfortable living by teaching online. You can write courses based on your experience and advertise your profile on social media platforms like linkedin.com. Begin by enrolling in some low-cost or no-cost basic level courses. Consider offering some paid advanced-level skills classes if the audience responds well. Here are some local and worldwide resources for looking for online teaching employment and/or submitting your online course:
hhttps://www.udemy.com/teaching/
https://sellfy.com/sell/courses-online/
https://www.skillshare.com/teach
Do you have an innate desire to write? Yes, you can work as a freelance writer for a range of local and online publications if you answered yes. There are a range of freelance assignments accessible, including translation, guest writing, blog post writing, essay writing, academic writing, book writing, and study, whether you’re a newbie writer or a seasoned researcher. It will enable you to teach people while also allowing you to earn money. Take a look at the resources listed below.
https://solidgigs.com/
https://remote.co/remote-jobs/writing/
https://www.freelancewriting.com/jobs/
Do you enjoy working with computers? You can get hired online if you know any programming language, including PHP, Python, C#, Java, and others. Based on your degree of education and experience, you should apply for freelance programming employment. Here are a few areas where you might look for work as an internet programmer.
https://www.upwork.com/freelance-jobs/database-programming/
https://www.peopleperhour.com/freelance-programming-jobs
https://www.indeed.com/q-Online-Programmer-jobs.html
https://www.ziprecruiter.com/Jobs/Online-Programmer
Don’t be concerned if you aren’t a designer, editor, or programmer. The Internet is a huge ocean of possibilities for a wide range of occupations. If you have experience in a specific field of knowledge, such as business proposal preparation, project management, or digital marketing, you should hunt for freelance employment in foreign marketplaces.
Here are some useful links:
How does the stock market work? In a nutshell, the stock market is a market place for business people. Goods are sold to the public in a public market. However, in the stock market, the public is sold share. Shares are the form in which company stock is sold. When a person purchases more shares in a company, they have a higher ownership in that company.
In the stock market, there is the primary market and the secondary market. In the primary market, companies sell shares to investors to raise financing for their operating expenses. In the secondary market, investors buy and sell shares in companies to other investors. Constantly changing market conditions are the basis of those buy and sell decisions.
A stock market operates much like an auction house, with a systematic way of buying and selling. The system in the stock market involves a great deal of bustling activity. Often there are people running around frantically, shouting and gesturing at one another.
The purchase and sale of stock starts at various places. A broker is contacted if a person wants to buy stocks in a certain company. The broker will take the investor’s money to the stock exchange to coordinate with a floor broker.
In most cases, the floor broker works for the company selling stock. Right on the stock exchange floor, brokers buy the desired stock for the investor. Once the deal is made, it is communicated to a broker and the investor then becomes a stockholder of that particular company.
Investors may decide to sell their stock. Usually investors want to sell their stock when the price per share increases so they can realize a profit on their investment. For example, a person may purchase 100 shares at the price of $25 per share. When the price increases to $35 per share, the person can sell the 100 shares and make a profit of $1,000.
The driving force behind the stock market is the basic economic principal of supply and demand. The number of stocks open to the public is the supply. The number of shares that investors what to purchase affects the demand of the stock in a certain company.
The constant change in the cost of stock is a result of conditions in other markets. For example, if people feel that the economy is growing they are apt to purchase more stocks. However, when the economy is in a decline, the majority of investors tend to sell off their stocks. On the flip side, some investors use this time to buy because the stock prices are usually at a discount.
There are quite a few business people who make long term investments in the stock market. In some situations, stocks go down in value and a stockholder loses money. There is no guaranteed profit when investing in the stock market. Thus, when a person is flexible and able to handle the constant changes of the stock exchange they are more likely to experience a profit.
So this is how the stock market works. In the end, patience, education and experience usually equals greater long term success.
While investing in the stock market is a risky proposition, that should not stop aspiring investors from taking that first leap. The secret of investing lies in having a stock market strategy for long term success.
Savvy investors only get into a stock market investment after they become aware of the necessary information about the company. It is unwise to invest in companies before learning everything about them including future plans, current performance and their past history.
It is impossible for an investor to know everything right away. Getting investment advice helps investors locate the right stock that will offer significant profits over time. And an investor should always be aware of the fundamental value of the stock they are purchasing.
Choose to invest in a company that is part of a familiar industry. An investor should have a decent understanding of the business they are investing in so they can fully comprehend the value of the stock. By having this type of knowledge, investors are more independent and do not need to rely solely on advisers and analysts.
Investors should carefully select the sources of information they rely upon. Tips offered out in the stock market should usually be avoided as they are typically provided by people with vested interest.
When investors get started in the stock market, it is important to set a long term goal for success. The goal determines the approaches to be used and influences the decision made in the future. Having a solid goal ensures greater regularity in the face of indecision when the stock market moves.
A long term goal helps investors avoid making spur of the moment decisions that could negatively affect their financial picture. A long term goal helps investors create a more stable financial future by making steady investment purchases. With a long term goal in mind, an investor has greater consistency.
Speculative ventures must be avoided when investing in the stock market. While there are risks in any business enterprise, they must be calculated carefully to reduce the possibility of loss and maximize potential profits. Guesswork simply does not work when it comes to stock market investing.
Stock investing is not gambling and should not be treated as a game. Investor can lose major money in the stock market and investments simply should not incur huge losses. It is simple to purchase stocks, but difficult to regain lost money.
No investor can afford to make costly mistakes in the stock market. When investors have the desire to gamble, the long term goal must be strictly reviewed and then followed. By revisiting the long term goal, investors can minimize the probability of investing too much money and losing it all.
Self-motivation is required for successful investing. To make the most of the stock market, the investor needs to have discipline and determination to keep persevering to achieve their goals.
To be a winner in investing today, you must have courage, passion, knowledge and a stock market strategy. A prudent investor can take advantage of the myriad of opportunities in the stock market for greater financial freedom in the future.
In days past, stock market information was limited and often buyers depended on stockbrokers to try to get the facts about investments. Today there are a variety of stock investment tools to assist modern investors and maximize the amount of information they can find about potential investments and trading activities.
The widespread use of the Internet puts a wealth of information at your fingertips right away. The Internet has facts about many publicly listed companies in the United States. Certain websites provide free research information, which may be rather general in nature but still useful to beginners. Other companies publish in-depth research reports outlining the activities of listed companies. These detailed reports may only be offered through a subscription, which may be an expensive choice for retail based investors. Based on the quality of the research provided about the company, such detailed reports may wind up costing hundreds or even thousands of dollars.
For simple background facts, stock investors can peruse news articles, analyst reviews and research reports intended to supply fundamental company information. This basic information can come from analyzing previously published financial reports or catching up on current news events regarding the company’s activities. This fundamental research can be a place to start to obtain more information so investors can adequately analyze the data to make educated investment decisions.
Investors can also take advantage of a variety of stock investment tools that offer management or raw data including current stock quotes, index performances or historical price data. Such tools may be purchased from a software company and then installed in computers. These tools assist in gathering, processing and analyzing raw data so the information is more useful to the investor.
For example, an investor can take raw data of the historical closing prices of certain companies and run it through investment software to find out additional information such as the volume of stocks traded on a particular company for a said period of time or the historical price trend of one company compared to an index of other companies. These stock investment tools generate reports that assist investors in developing more effective trading strategies from the raw data they originally had.
Certain stock investment tools purchased from various software companies may cost hundreds of dollars. This type of pricey investment may not be practical for small scale investors looking to make a profit right away. Individual or beginning investors can take advantage of analysis tools on the Internet made available from stock market companies for free to their clients. These tools are also made available for free to online investment clients to help them develop their trading strategies to try to achieve profits.
Efficient stock investment tools, research products and information are readily accessible on the Internet for your convenience. However, it still requires data gathering, interpretation of analysis and careful planning to ensure successful trading. By using some online tools and careful analysis of the data, investors can develop viable trades for long term investment growth.
Choosing a reliable router is critical for getting the best WiFi performance out of your home network. Discover how to choose the best wireless router for your home WiFi.
In Nepal, we have routers ranging from low-end to very high-end for various customer classes. TP-Link, Nokia, NETGEAR, Digicom, and other brands are available. When you setup a new internet connection, you are given a default router that meets the most basic criteria. However, if you want to ensure optimal performance as well as improved security for your home network, you must consider a number of variables.
More antennas (MIMO) correspond to improved signal direction and allow you to receive the maximum bandwidth equitably across all of your devices. Using numerous antennas generates numerous streams of data packets over radio channels, increasing data speed to the devices.
Routers with only one antenna are a thing of the past. All ISPs now provide their clients with dual antenna routers. However, if you want greater confidence, you can purchase a router with three additional antennae if necessary. However, there are more performance criteria than just antennas, which brings us to frequency bands.
As our internet requirements grow, so should the functions of routers. We require routers that provide continuous connections while using the same bandwidth. This necessitates the use of a dual-band router capable of delivering a continuous connection. Routers operate on two frequencies: 2.4GHz and 5GHz. A 6 GHz model is on the way.
Another important element for modern companies or even households is the USB port. We can connect hard drives, printers, and other devices to the router and use them to run prints, examine data, and update software. If you have a USB C connector, you can charge your phone while making critical calls.
Currently, most routers that come included with ISPs include a USB 2.0 port. If you want to go a step further, get your new router with USB 3.0 and USB-Type C capability.
In recent years, the concept of smart houses has grown in popularity. Although the definition of a smart home is hazy, it includes the use of IoT, Alexa, Chromecast, Sensors, and other devices that require a stable internet connection with a high bandwidth speed.
A router that is linked with Alexa or Google Assistant is required to supplement the demands for a Smart Home connection.
Having a router with smart home integration will allow you to run many apps and devices at the same time, resulting in a domestic eco-system. You can control the router by speaking commands to Alexa. You can enable or disable WiFi, switch off the router’s LED lights, and so forth.
If you want to buy a router that works with Alexa, you can go with the TP-Link Deco Voice X20 or look for others available in Nepal.
An extension is good for one or two rooms, but if you want a full WiFi network solution, a mesh router is your best alternative.
It is possible to infiltrate a greater area with a mesh Wifi router, such as the balcony or the basement, to the poolside.
Mesh routers use two or more connected devices to provide a consistent WiFi signal throughout your area. It’s similar to configuring a slew of routers at home. Mesh router settings will provide you with a flawless WiFi connection in any room or region of your home.
Mesh WiFi routers can easily found online.
Security features are critical for protecting your home network from hackers and spies. Routers do include security measures such as antivirus software, VPNs, and other extensions to help safeguard the connection. The issue is that these features are not properly supported by routers with low-cost hardware.
The image above depicts a typical menu of a Wifi Router that comes standard with Ntc FTTH.
Allow yourself some time to research a specific router if you have your heart set on it. You should look at its performance, dependability band, and security features to see if it meets your needs.
You may find professional reviews on reputable websites, as well as consumer evaluations on YouTube. You can also read the buyer reviews and learn from their experiences. It does aid in determining whether the router you desire will satisfy your expectations. Learning ahead of time will save you money and help you avoid future regrets.
So those are the guidelines we prepared to assist you in determining your next best router. However, it is entirely dependent on your needs and budget. Most default routers provided by ISPs have a single band that operates at 2.4GHz. They have one or two USB 2.0 ports as well as basic security measures and a restricted network range.
We have compiled a list of critical elements that will ensure you get the best performance out of your router. However, the following critical question is which one you would require. Do you require a WiFi router with a 5GHz band, or do you require a WiFi Mesh router for a greater area? Or would you be OK with a standard router with a 2.4GHz band?
The solution is in your goals. If you’re looking for a router for a large workplace with a lot of employees who use a lot of bandwidth, the default router from your ISP might not be the best option. Furthermore, network congestion may not be beneficial on a standard router. For constant performance, you may need to purchase a 5GHz router.
Meanwhile, if you’re only using it for your little family, any basic router will suffice. Spend less on specifications and more on dependability and ease.
In Nepal, you may purchase routers ranging in price from NRs. 2,000 to NRs. 15,000 or above. The major brands that offer numerous routers in various classes include TP-Link, Digicom, NETGEAR, and others. Mesh routers and repeaters are also available from several online retailers. As a result, first decide what features you want in a router before parting with your money. Having the greatest Wifi router is one strategy for increasing your internet speed.
Which WiFi router are you currently using? Are you happy with its signal range and performance, or do you intend to replace it? What features in a decent wireless router are most important to you? Please share your thoughts in the comments box below.
Everyone is looking for a quick and easy way to riches and happiness. It seems to be human nature to constantly search for a hidden key or some esoteric bit of knowledge that suddenly leads to the end of the rainbow or a winning lottery ticket.
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding growth. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.
Here are several tips that should be followed by beginning investors.
Everyone is looking for a quick and easy way to riches and happiness. It seems to be human nature to constantly search for a hidden key or some esoteric bit of knowledge that suddenly leads to the end of the rainbow or a winning lottery ticket.
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding growth. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.
Here are several tips that should be followed by beginning investors.
1. Set Long-Term Goals
Why are you considering investing in the stock market? Will you need your cash back in six months, a year, five years or longer? Are you saving for retirement, for future university expenses, to purchase a home, or to build an estate to leave to your beneficiaries?
Before investing, you should know your purpose and the likely time in the future you may have need of the funds. If you are likely to need your investment returned within a few months, consider another investment; the stock market with its volatility provides no certainty that all of your capital will be available when you need it.
By knowing how much capital you will need and the future point in time when you will need it, you can calculate how much you should invest and what kind of return on your investment will be needed to produce the desired result.
Remember that the growth of your portfolio depends upon three interdependent factors:
Ideally, you should start saving as soon as possible, save as much as you can, and receive the highest return possible consistent with your risk philosophy.
2. Understand Your Risk Tolerance
Risk tolerance is a psychological trait that is genetically based but positively influenced by education, income, and wealth (as these increase, risk tolerance appears to increase slightly) and negatively by age (as one gets older, risk tolerance decreases). Your risk tolerance is how you feel about risk and the degree of anxiety you feel when risk is present. In psychological terms, risk tolerance is defined as “the extent to which a person chooses to risk experiencing a less favourable outcome in the pursuit of a more favourable outcome.” In other words, would you risk NPR 1000 to win NPR 10,000? Or NPR 10,000 to win NPR 10,000? All humans vary in their risk tolerance, and there is no “right” balance.
Risk tolerance is also affected by one’s perception of risk. For example, flying in an aeroplane or riding in a car would have been perceived as very risky in the early 1900s, but less so today as flight and automobile travel are common occurrences. Conversely, most people today would feel that riding a horse might be dangerous with a good chance of falling or being bucked off because few people are around horses.
The idea of perception is important, especially in investing. As you gain more knowledge about investments – for example, how stocks are bought and sold, how much volatility (price change) is usually present, and the difficulty or ease of liquidating an investment – you are likely to consider stock investments to have less risk than you thought before making your first purchase. As a consequence, your anxiety when investing is less intense, even though your risk tolerance remains unchanged because your perception of the risk has evolved.
By understanding your risk tolerance, you can avoid those investments which are likely to make you anxious. Generally speaking, you should never own an asset which keeps you from sleeping in the night. Anxiety stimulates fear which triggers emotional responses (rather than logical responses) to the stressor. During periods of financial uncertainty, the investor who can retain a cool head and follows an analytical decision process invariably comes out ahead.
3. Control Your Emotions
The biggest obstacle to stock market profits is an inability to control one’s emotions and make logical decisions. In the short-term, the prices of companies reflect the combined emotions of the entire investment community. When a majority of investors are worried about a company, its stock price is likely to decline; when a majority feel positive about the company’s future, its stock price tends to rise.
A person who feels negative about the market is called a “bear,” while their positive counterpart is called a “bull.” During market hours, the constant battle between the bulls and the bears is reflected in the constantly changing price of securities. These short-term movements are driven by rumours, speculations, and hopes – emotions – rather than logic and systematic analysis of the company’s assets, management, and prospects.
Stock prices moving contrary to our expectations create tension and insecurity. Should I sell my position and avoid a loss? Should I keep the stock, hoping that the price will rebound? Should I buy more?
Even when the stock price has performed as expected, there are questions: Should I take a profit now before the price falls? Should I keep my position since the price is likely to go higher? Thoughts like these will flood your mind, especially if you constantly watch the price of a security, eventually building to a point that you will take action. Since emotions are the primary driver of your action, it will probably be wrong.
When you buy a stock, you should have a good reason for doing so and an expectation of what the price will do if the reason is valid. At the same time, you should establish the point at which you will liquidate your holdings, especially if your reason is proven invalid or if the stock doesn’t react as expected when your expectation has been met. In other words, have an exit strategy before you buy the security and execute that strategy unemotionally.
4. Handle Basics First
Before making your first investment, take the time to learn the basics about the stock market and the individual securities composing the market. There is an old adage: It is not a stock market, but a market of stocks. Your focus will be upon individual securities, rather than the market as a whole. There are few times when every stock moves in the same direction; even when the averages fall by 100 points or more, the securities of some companies will go higher in price.
The areas with which you should be familiar before making your first purchase include:
Knowledge and risk tolerance are linked. As Warren Buffett said, “Risk comes from not knowing what you are doing.”
5. Diversify Your Investments
Experienced investors such as Buffett eschew stock diversification in the confidence that they have performed all of the necessary research to identify and quantify their risk. They are also comfortable that they can identify any potential perils that will endanger their position, and will be able to liquidate their investments before taking a catastrophic loss.
The popular way to manage risk is to diversify your exposure. Prudent investors own stocks of different companies in different industries, sometimes in different countries, with the expectation that a single bad event will not affect all of their holdings or will otherwise affect them to different degrees.
Imagine owning stocks in five different companies, each of which you expect to continually grow profits. Unfortunately, cirplusstances change. At the end of the year, you might have two companies (A & B) that have performed well so their stocks are up 25% each. The stock of two other companies (C & D) in a different industry are up 10% each, while the fifth company’s (E) assets were liquidated to pay off a massive lawsuit.
Diversification allows you to recover from the loss of your total investment (20% of your portfolio) by gains of 10% in the two best companies (25% x 40%) and 4% in the remaining two companies (10% x 40%). Even though your overall portfolio value dropped by 6% (20% loss minus 14% gain), it is considerably better than having been invested solely in company E.
6. Avoid Leverage/Margin Loan
Leverage/Margin loan simply means the use of borrowed money to execute your stock market strategy. In a margin account, banks and brokerage firms can loan you money to buy stocks, usually 50% of the purchase value. In other words, if you wanted to buy 1000 shares of a stock trading at NPR 100 for a total cost of NPR 100,000, your brokerage firm could loan you NPR 50,000 to complete the purchase.
The use of borrowed money “levers” or exaggerates the result of price movement. Suppose the stock moves to NPR 200 a share and you sell it. If you had used your own money exclusively, your return would be 100% on your investment [(200,000 -100,000)/100,000]. If you had borrowed NPR 50,000 to buy the stock and sold at NPR 200 per share, your return would be 300 % [(200,000-50,000)/$50,000] after repaying the NPR 50,000 loan and excluding the cost of interest paid to the broker (which is usually 16% and over).
It sounds great when the stock moves up, but consider the other side. Suppose the stock fell to NPR 50 per share rather than doubling to NPR 200, your loss would be 100% of your initial investment, plus the cost of interest to the broker [(50,000-50,000)/50,000].
A margin is a tool that can go extremely bad in a stock market like Bangladesh.
Final Thoughts
Stock investments historically have enjoyed a return significantly above other types of investments while also proving easy liquidity, total visibility, and active regulation to ensure a level playing field for all. Investing in the stock market is a great opportunity to build large asset value for those who are willing to be consistent savers, make the necessary investment in time and energy to gain experience, appropriately manage their risk, and are patient, allowing the magic of compounding to work for them. The younger you begin your investing avocation, the greater the final results – just remember to walk before you begin to run.