Tag: news

Boosting Your ROI in Stock Market Investing

Everyone wants a high return on their investment in stock market trading. First let’s consider the basics and the ways to earn the most on your investments.

Return on Investment

Usually referred to as ROI, the Return on Investment in stock market investing is the profit earned from selling a security or other asset divided by the amount of the original investment. With stocks, your ROI is expressed as an APR (annual percentage rate).

Your ROI is all the income you make on the stock, which also includes profit earned from selling the stock. When the sales price plus any other income is higher than the price you purchased the stock for, your ROI is positive.

When the sale price plus any other income is lower than the price you bought the stock for, you have a negative ROI (which is obviously what you want to avoid). In fact, as a trader in the stock market, your goal is a high ROI, not just a positive one. To achieve a substantial ROI, consider the following methods to boost your current stock investing efforts.

Know What You Are Purchasing

To ensure a high ROI in stock market investing, garner as much information as you can about the company you want to invest your money in. A bit of basic analysis to find out if the stock is worth the asking price can go a long way. Rather than gambling, you can also ask other people to do this research for you if you don’t have the time to do it yourself. Reliable research resources include the websites of major brokerage firms, mutual fund companies and finance publications. There are also paid newsletter that offer this information.

A Bull Market Is Not The Same As Smart Investing

When you earn a high ROI in stock market investing, there are many reasons for it. One of the possible reasons is your wise investment strategy. Another reason can simply be the good fortune to be in the right place at the right time so you wind up making money with minimal effort. We may feel smarter when the market is soaring so we get tempted to take on riskier positions and trade more frequently, which may not be the wisest decision.

Deactivate Active Trading

You may feel tempted to trade frequently when you are gaining. With online stock trading, investment is a mouse click away which can make you even more impulsive. Remember that it is difficult to make money by beating the stock market consistently. In stock market trading, it is better to have a buy and hold strategy to ensure a high ROI.

Take Note of The Tax Man

Pay attention to tax ramifications when trading stocks. Frequent trading can become extremely costly, especially when major income taxes are triggered by profits. By buying and holding for a period of at least one year, you would qualify for a lower capital gains rate. Your financial advisor should be able to consult with you on this.

January 3, 2023
Stock Trading in Nepal – An Introduction

A share is essentially a fraction of a company’s ownership. Purchasing or selling shares entails acquiring or disposing of a portion of the company’s ownership. The stock market, also known as the share market, is a place where you can buy and sell stocks. In order to raise money, public corporations usually sell shares to the public, but the stock market often trades other instruments such as debentures, bonds, and mutual funds.

Dividends are a way for you to get a piece of those companies’ earnings as a shareholder. While share trading is an exciting way to earn money both actively and passively, it is also risky since investors can have to bear the loss if the company fails. As a result, as a novice, it is important that you gain a thorough understanding of the market before investing your money in stocks.

Here is a brief introduction of how you can participate in the game of stock trading.

1. GET STARTED: OPEN A DEMAT ACCOUNT

Opening a dematerialized (DEMAT) account at one of the Depositary Participant (DP) licensed by the Central Depository System and Clearing Limited (CDSC) is a prerequisite to participate in both primary and secondary market. Most commercial banks, merchant bankers and stockbrokers provide such services. If you already own some stocks in your name, then you can give your DP to dematerialize your physical share certificates into dematerialized shares. The DEMAT account is similar to a bank account which debits and credits the shares you sell or purchase. Most DP’s also provide clients with facilities to check their DEMAT account status online as well.

2. KNOW THE MARKET

To get started in the stock market, it is essential to first understand how the market functions. Securities Board of Nepal (www.sebon.gov.np); the sole regulator of the capital market is a useful source for primary information. Its website provides information on various securities laws, investor education, and upcoming public issues amongst others. Similarly, the Nepal Stock Exchange (www.nepalstock.com) the sole secondary market; and its mobile-based application is a great source to get hands-on information. There are many other popular websites that provide constant updates about the capital market such as; Share Sansar and Mero Lagani. Furthermore daily national newspapers, websites of merchant bankers and credit rating agency – icranepal.com – also provide good information.

3. PARTICIPATE IN THE PRIMARY MARKET – APPLY IN PRIMARY OFFERINGS

One of the best opportunities to participate in the capital market is to apply for primary offers in the primary market such as; Initial Public Offering (IPO) or Further Public Offering (FPO). Most companies offer primary issues to the general public at face value of NPR 100 per stock, or at a premium based on their valuations. The risk is lower when you purchase in the primary market as you get an opportunity to buy shares at a lower cost as compared to purchasing those shares in the secondary market once they are listed. Also, look out for opportunities to participate in the primary offering of mutual fund schemes which can be a beginning point.

News about primary issues generally comes out in national newspapers and are widely announced on other media platforms. Once you know the primary issues are out, you can read their prospectus to see their detail information such as; past and projected performance, & management amongst others. You can also look at their credit rating provided by a licensed credit rating agency before making the decision to invest.

4. PARTICIPATE IN THE SECONDARY MARKET– OPEN A TRADING ACCOUNT AT A STOCKBROKER OFFICE

All the stocks offered via the primary market are listed in the secondary market i.e. Nepal Stock Exchange (NEPSE); currently, there are 231 companies listed in the stock exchange. The secondary market provides the platform to sell the shares you hold or purchase new shares from the market. The share price of these listed companies and the value of NEPSE Index changes every day based on total demand and supply of shares in the market.

If you wish to get involved in the secondary market, you will need to open a transaction account at a stock broker’s office. There are currently 50 stockbrokers licensed by NEPSE while there are a few stock broker offices outside Kathmandu. Once you open an account with a stockbroker, they will provide you with a unique ID code via which all the transactions in your name will be executed.

To make a purchase or sale order you will simply have to call your stock brokers or visit their office to place an order, make sure you have the shares in your DMAT account before you place a sell order to your stockbroker. The stockbroker charges some commission as a brokerage fee for each transaction while you have also have to pay a capital gain tax of 5% if applicable while making sales.

5. STILL CONFUSED- SEEK PROFESSIONAL HELP

If you are still confused and less confident about entering the market or you do not have time, energy and resources, do not worry as there are a number of professional licensed Portfolio Management Companies providing you with a full range of products and services under Portfolio Management Services (PMS). Based on your investment goals and expectations, these portfolio managers develop portfolios matching your risk appetite and invests in the capital markets on your behalf. The portfolio manager charges minimal annual and performance fees while these services offer you the opportunity to grasp the benefits of the capital markets. Moreover, you can also handover your existing portfolio to these portfolio managers for restructuring and further management.

All in all, as the stock market is constantly evolving and getting technical, retail investors are highly advised to seek professional advice and avoid making investments on herd mentality – invest wisely!

January 3, 2023
Bitcoin Has Dropped 50% From Its All-Time High

Bitcoin prices have plummeted in recent months, losing more than half their value since mid-April and falling to just under $30,000 this morning.

According to CoinDesk numbers, the world’s most common digital currency reached $30,201.96 today.

According to additional CoinDesk data, it was down more than 55 percent from its all-time high of nearly $65,000 at this point.

At the time of writing, the cryptocurrency was trading around $37,000, and many market analysts weighed in, shedding light on the digital asset’s recent price fluctuations and evaluating its short-term prospects.

[Editor’s note: Investing in cryptocoins or tokens is extremely risky, and the market is largely unregulated.] Anyone thinking about it should be aware that they might lose their entire investment.]

Selling Pressure That Is ‘Relentless’

“Over the last 24 hours, the selling pressure in the BTC market has been relentless, perfectly aligning with elevated bitcoin inflows to exchanges seen on-chain,” said Sean Rooney, head of research at Valkyrie Investments.

“Binance led the charge on Monday, with over 53,000 BTC dumped into the exchange to be sold,” he explained.

Nick Mancini, a research analyst at Trade The Chain, a crypto sentiment data provider, discussed how events like these influenced prices.

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“Bitcoin is now down 45 percent from its April high of nearly $65,000,” he said.

“Short-term sentiment seemed to be bottoming out with price, but it appears that they were only consolidating for a further decline,” Mancini said.

“The good news is that Bitcoin’s primary liquidity levels in the $30,000 range remained stable throughout the decline, causing the price to recover from $30,000 to near $37,000 in less than an hour.”

“Key support levels are $28,500, $24,000, and $20,000, which all correspond to order book liquidity levels,” Mancini said.

StockCharts.com’s chief market strategist, David Keller, added:

“Bitcoin’s drop to $30,000 made technical sense because it’s a 100 percent retracement back to the January lows. It’s all about seeking equilibrium after a serious selloff like this.”

“Where do we see investors with enough clout to drive the price back up?”

“Based on previous price support and the influx of buyers this morning, $30,000 is the new floor for Bitcoin,” Keller said.

Market Is ‘Oversold’

The market may have overreacted in light of recent events and bitcoin’s losses since roughly mid-April, according to analysts.

According to Mancini, Bitcoin’s relative strength index (RSI), a technical measure used to gauge an asset’s momentum, recently dropped to “the lowest level since March 2020,” meaning the digital currency is “highly oversold.”

He also stated that the Moving Average Convergence Divergence (MACD), a momentum indicator used by technical analysts, is “at its lowest level in Bitcoin’s history, further suggesting Bitcoin is oversold.”

“The market is due for a bounce,” according to Rooney, but “a fast turnaround in the short term is unlikely.”

“A correction of this magnitude in the middle of a bull market seems out of place, but the absence of mania topping trends indicates the bull run is not over,” he said.

“With new users joining the network, long-term fundamentals on-chain remain strong.”

January 3, 2023