How To Invest In a Stock Market – 4 Rules For Investment In Stocks – Part 1

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Learn How To Invest In a Stock Market – 4 Rules For Investment In Stocks For Beginners – Part 1

In this video, I have given an Investment Strategy with 4 simple rules or 4 point checklist for successful Investment In Stocks. I have listed out the 4 points as Stock Volatility, Stock Cycle (Accumulation or Distribution), Stock Performance (Fundamental performance) and Stock Relative Strength (Stock Out performance or Under performance).

In the Stock Volatility Rule, I have shown why Investors must focus on Investing in Stocks with low Volatility. Over the period of long run, low volatility stocks tend to out perform stocks with higher volatility.

In the Stock Cycle Rule, I have explained Richard Wyckoff’s Accumulation and Distribution cycle chart. I have made case as to why Investors should make Investment In Stocks which are breaking out of their Accumulation range and entering in a mark up phase.

In the Stock Performance Rules, I have highlighted the importance of Investment in Stocks with good fundamentals. Without complicating this section too much, I have picked out ROE, ROCE, Debt to Equity and Profit growth as the most important factors to consider.

In the Stock Relative Strength Rule, I have highlighted the importance of Investing in Stocks which are rank out performers. This way, Investors get to Invest their money in the Strongest stocks belonging to the Strongest sectors. I have done a separate 3 part video on Relative Strength and links for same is posted below.

Part 2 of How To Invest In a Stock Market For beginners will be released next week on June 9th 2018.

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How To Invest In a Stock Market Using Relative Strength Analysis

Part 1 link : https://www.youtube.com/watch?v=RVbze1duD-U

Part 2 link: https://www.youtube.com/watch?v=BxY2ofigO8I

Part 3 link: https://www.youtube.com/watch?v=488FDla8kuc

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Market Analysis Video is released every Friday 9 Pm IST

Educational Video is released every Saturday 8 Am IST

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7 COMMENTS

  1. //Volatility Indicator For Amibroker Software.

    _N(Title = StrFormat(Name()+ " {{DATE}} – Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 )) ));

    HV = StDev(ln(Close/Ref(Close,-1)), 20)*100*sqrt(252);

    Plot(HV, "HV 20", colorRed, styleLine);

  2. somewhere around @8:48 time mark, you mentioned about GROWTH CAGR around 20%, in factual analysis, this may prove to be hazardous. While calculating CAGR for stock, shouldn't we also consider the volatility.
    Keeping volatility in mind, instead of simple CAGR, if we look at 'RISK ADJUST CAGR', and compare it with 'SIMPLE CAGR' we will truely get an idea of risk we are taking.

    FYI, Formula for RISK-ADJUSTED CAGR = CAGR * (1 minus Standard Deviation).

    I came to know about this thing, when I invested in Mutual Funds. I always used to see high figure of returns in MF but never actually got that much. Mutual fund companies emphasize their CAGRs from different time periods in order to get us to invest in their funds, but they rarely incorporate a risk adjustment. It is also important to read the fine print in order to know what time period is being used. Advertisements can tout a fund's 20 percent CAGR in bold type, but the time period used may be from the peak of the last bubble, which has no bearing on the most recent performance.

  3. I know how to get technical tools like rsi, macd and so on. Where to get the relative strength data for stocks?

  4. This is a two part series.

    Second Part will be released on 9th June 2018 and will cover specific Entry – Exit techniques for Investments.

    Thanks for watching this guys. Tc.

    Let me know if you have any doubts as such.

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