Today, investing in the stock market has become a challenging task, in which we need to do a lot of analysis to select a stock so that we can select a good stock for the long term and earn maximum profit.
Step 1: Analyze the stock chart trend.
To select any stock, it is important to see what kind of pattern its chart is showing, if the pattern is of uptrend, then this can be the most primary step to select any stock. If any stock is in downtrend for a long time, then it should be avoided.
Step 2: Decoding the promoter’s holding.
Before selecting any stock, the promoter’s holding should be checked through NSE or other website. If the promoter’s holding is more than fifty percent, then it can be considered as the second step to select the stock. Also, it should be checked whether the promoter’s holding is pledged or not. If more holdings are pledged, the stock can be left for further analysis.
Step 3: Market Capitalization.
Market capitalization is one of the most important steps to analyze what type of company we are selecting. Whether it is small cap, mid cap or large cap. Risk taking capacity is different for different investors. This analysis can be done by NSE or other website.
Step 4: Debt free.
Proper balance sheet should be checked before selecting any stock. If the company is completely debt free, then it can be considered on top priority. If short term debt is taken as the company is growing, it can be good for future growth. If the company shows regular profits, then the debt should be reduced on quarterly basis.
Step 5: FII/DIS/Mutual Fund Holding.
This data should also be analyzed, increasing holding as mentioned above means that the company is growth oriented in the near future and the stock price may increase. It is also important that if the holding of one fund is decreasing and the holding of another is increasing then it means it is a good sign to select the stock.
Step 6: Company Management.
The management record of the company should be checked from the original website of the company or a certified source. Good management gives good growth to the company. The management goal should be growth oriented in the future. Step
Step 7: Mastering Risk Management.
Minimize risks effectively by mastering the art of risk management. Understand how the 8th key combines with a comprehensive risk strategy, ensuring that your portfolio remains resilient in the face of uncertainties.
Step 8: Future-oriented Cycle of Bushiness/Capability.
The final step involves identifying the company which business is future oriented and which product is currently in use as well. If the steps mentioned above are giving good indications then the stock can be selected in the portfolio.
Author’s Viewpoint and Disclaimer: This blog article is for study purpose only. Any stock can be selected as per proper analysis and guidance of a financial advisor. These steps can be used to select any stock and do your own analysis. Armed with this step-by-step guide, you are now ready to unlock the hidden gem – the 8th key in stock picking. Embrace the journey, constantly educate yourself, and apply these principles with diligence. The world of stock market investing is vast, and within it lies your unique path to financial success. Happy investing!
