When markets are trending up it is easy to make many. It is when the markets are sliding down that the problem arises. Karan Bhojwani explains in detail how to optimally profit from falling markets!!
One of the primary reasons individuals put their money into the stock market is because over time stocks tend to rise and provide a decent measure of returns for the investors. So the rule, ‘Buy Right: Sit Tight’, is often quoted by numerous successful financial specialists. 'Buy right' implies purchasing quality stocks at a sensible price, while 'sit tight' means holding the stock for a reasonable period of time to realise the full growth potential of the stock. But the journey of wealth creation is not always a joyful ride, as the market is subject to downswings. There are some individual stocks which, notwithstanding the rise in the market, continue to languish due to various reasons such as terrible management, poor business prospects, increase in competition, new regulations which are not favourable for the company, and many other factors. These are the stocks most financial specialists attempt to stay away from. Be that as it may, how does one make profit when an individual has reason to believe that a stock or the market will be heading downward? One can make profit from the concept called 'short selling' or 'shorting', wherein they can gain from a decline in the price of the stock.
WHAT IS SHORT SELLING?
Every investor understands the traditional approach to making profit in the stock markets. You purchase a stock today, then sit tight and wait for the price to go higher than the cost price you have paid, and when the price goes up, sell the stock for a profit. This is known as going “long” the stock. Quite simple and direct.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
