Stocks or equities implies to securities that provide shareholders an ownership interest in a public company. The stock market is made of hundreds of companies that raise capital by selling off their shares to discerning investors. There are many factors that impact the value of these shares, including earnings per share (EPS), return on equity (ROE) and dividend yield. As per Kavan Choksi UAE says, anyone interested in investing in stocks should first acquire a good understanding of its basics, in order to make informed financial decisions
Kavan Choksi UAE sheds light on a few valuable stock market insights for beginners
Investing in the stock market can be a pathway to grow wealth over time. Having a disciplined approach to stock investing can help people to grow their investments significantly. Reinvesting dividends over time may also lead to exponential growth. Moreover, dividend-paying stocks tend to generate steady returns without active involvement.
Prior to investing in stocks, however, one must have a proper understanding of fundamental metrics like revenue and basic earnings per share (EPS). It essentially is a rough measurement of the amount of company’s profit that can be allocated to a single share of its stock. Publicly traded companies generally report their earnings and other financial information every quarter. Hence, for any stock one may consider investing in, it would be a good idea to check the recent earnings history of the company. One must check whether the company has a track record of falling short of or beating the EPS forecasts.
Another good source of acquiring insights about a stock is earnings conference calls. These tend to be held shortly after a company reports quarterly results. By listening in, newbie investors may gain a better perspective of what the CEO is thinking as well as what are the questions analysts and investors are asking the leadership of the company.
As per Kavan Choksi UAE, that it is common to use technical indicators like chart patterns, trading volume statistics and more when making buying and selling decisions. Investors might study “momentum” readings, which depict how fast or slowly a price is moving up or down, or try to spot early developing price trends. Similar practices can be followed by stock market beginners in order to see what direction a stock has been moving as well as where it might be going.
A useful method for identifying market trends involves using two moving averages, the 30-day simple moving average (SMA) and 10-day exponential moving average (EMA). 30-day SMA calculates the stock’s average closing price over the past 30 days, while 10-day EMA provides more weight to recent prices. When a stock is trading above both its 30-day SMA and 10-day EMA, technical traders often interpret this as a strong upward trend.
As markets are influenced by human behaviour, emotions like fear, excitement, and uncertainty can impact price movements. Stocks may rise, fall, or remain stagnant without any such obvious reason. For beginners, it is essential to recognize the factors within their control and avoid making impulsive decisions based on emotions.