People engage themselves in making investment with just one motif- to make some money. There are multiple investment options that are open in the market, and stock market is one of the preferable ones. There’s no doubt about the inherent risks that stock market possess, but if they are taken with prior calculation and if the speculations are based on some proper research work, one can very easily make huge amount of profits from it. To make substantial amount of profit from an investment in the stock market, one needs to possess certain skills, have patience and adhere to the knowledge of how the entire business operates.
Everyone who makes some investment in the stock market, always have got one question in mind, and that’s how the money grows. For them, it is essential to know that there are two possible ways that money adopts in order to multiply. Firstly, it’s through the increase of the stock value- which according to expert like Ram V Chary is determined solely by the capital appreciation. Capital appreciation is nothing but the rise of value of the stocks depending on the rise in market price. Generally, when the capital that has been invested in a stock increases its value, the capital is being appreciated.
Even if the value of the stock finds some increase, one will not be able to earn until and unless the shares are being sold. When the company whose stocks are being sold in the market, fails to make substantial amount of improvements in the business, the prices of the stocks go down and there are chances of facing huge loss. So the experts believe that the right time to sell away the stocks in the market is when the price is high from the amount at which they have been bought.
The other major way in which money can be earned is the dividends that the companies pay to all its shareholders. The dividends are generally calculated based on the revenues that it earns at the end of the financial year. The modes of paying the dividends are generally of two types- cash & stock dividend. The cash dividend is calculated based on the amount of revenue that has been earned on a particular stock, and the stock dividends are the extra stocks that are being given to the shareholders without being charged, on a simpler note, for free. These dividends can be earned quarterly, half yearly or annually- and the moment these stocks are being handed over, the shareholder is free to sell it off anytime they feel like. Even there are options of fixed rate and variable rate systems upon which these dividends are being calculated.
But apart from all these, those who plan to invest in the stock market must have the knowledge of it in order to make solid grounds for earning money. Experts like Ram V Chary provide suggestions and consultation to their clients when they ask for. It makes sense to take these expert comments rather than spending blindly on a stock.