1) A Complete Guide On Investing :--
How to Invest in Stocks: A Beginner’s Guide
- 1) Set Clear Investment Goals
- 2) Determine Hoe much You can afford to Invest in
- 3) Determine Your tolerance to Risk.
- 4) Determine Your Investing Style .
- 5) Choose an Investment Account
- 6) Learn the Costs of Investing
- 7) Pick Your Broker
- 8) How To Fund Your Stock Account
- 9) Pick Your Stocks
- 10) Keep Learning About Investing In Stocks
- 1. Utmost Good Faith
- 2. Proximate Cause
- 3. Insurable Interest
- 4. Indemnity
- 5. Subrogation
- 6. Contribution
- 7. Loss Minimization
- 1. Life Insurance
- 2. General insurance
Depending on the coverage, life insurance can be classified into the below-mentioned types:
- Term Insurance: Gives life coverage for a specific time period.
- Whole life insurance: Offer life cover for the whole life of an individual
- Endowment policy: a portion of premiums go toward the death benefit, while the remaining is invested by the insurer.
- Money back Policy: a certain percentage of the sum assured is paid to the insured in intervals throughout the term as survival benefit.
- Pension Plans: Also called retirement plans are a fusion of insurance and investment. A portion from the premiums is directed towards retirement corpus, which is paid as a lump-sum or monthly payment after the retirement of the insured.
- Child Plans: Provides financial aid for children of the policyholders throughout their lives.
- ULIPS – Unit Linked Insurance Plans: same as endowment plans, a part of premiums go toward the death benefit while the remaining goes toward mutual fund investments.
- • Health Insurance: Covers the cost of medical care.
- • Fire Insurance: give coverage for the damages caused to goods or property due to fire.
- • Travel Insurance: compensates the financial liabilities arising out of non-medical or medical emergencies during travel within the country or abroad
- • Motor Insurance: offers financial protection to motor vehicles from damages due to accidents, fire, theft, or natural calamities.
- • Home Insurance: compensates the damage caused to home due to man-made disasters, natural calamities, or other threats
- Definition: Value investors actively seek out stocks that they believe the stock market is underestimating. They use financial analysis to identify companies whose stock prices do not correspond to their long-term fundamentals. These investors aim to purchase these undervalued stocks at discounted prices.
- Founders and Notable Practitioners: The concept of value investing was developed by Columbia Business School professors Benjamin Graham and David Dodd in 1934. It gained popularity through Graham’s 1949 book, “The Intelligent Investor.” Some well-known value investors include Warren Buffett, who is probably the most famous, along with others like Charlie Munger, Seth Klarman, and Christopher Browne (a student of Graham).
- Approach and Strategies:
- Financial Analysis: Value investors analyze financial statements, balance sheets, and other relevant data to assess a company’s intrinsic value.
- Contrarian Approach: They don’t follow the herd mentality and often invest against prevailing market sentiment.
- Long-Term Perspective: Value investors focus on quality companies and take a long-term investment horizon.
ASSETS include all the value you have on hand. Some of it is cold hard cash—like the business bank account line item in the example above, which holds $20,000. Some of it is less liquid, like equipment or inventory. And some may not even be in your hands yet—accounts receivable, or payments you’re due to receive.
LIABILITIES cost you money. Subtracting them from your assets gives you a rough idea of how much value your business really has to work with. In the example above, accounts payable—typically payments to vendors or contractors—could be considered a short term liability; you’ll probably pay them off each month. Other liabilities, like business loan debt, stick around longer.
OWNER’S EQUITY is the money that you, the owner, has sunk into the business. Capital is your initial investment, the money you used to get up and running. Retained earnings is the profit your business has held onto. And drawing, or owner’s draw, is the money you pay yourself from your business. (For the sake of tidy accounting and liability, you shouldn’t use your company’s retained earnings as a personal spending account.)
Your income statement tells you how much money your business has spent, and how much it has earned, over a financial reporting period. That lets you calculate your net profit—the bottom line.
The reason it’s called the bottom line is because net profit is at the bottom of your income statement. As you work down your income statement, more and more expenses get applied to your revenue, meaning your income line item becomes more and more specific.
Sales revenue, the top line, is all the money that has come into the business during the month, before taking any expenses into account.
Cost of Goods Sold (COGS) is the money Erin spent in order to earn her sales revenue. For a retail business like Erin’s, that’s typically the wholesale cost of products.
Gross profit is Erin’s income, after subtracting COGS, but without taking general expenses into account.
General expenses includes money Erin has to spend on a monthly basis to keep her business running and making sales. Some of these, like rent, will be the same month to month. Others, like utilities and office supplies, may fluctuate.
Operating earnings (or EBITDA—Expenses Before Interest, Taxes, Depreciation, and Amortization)—equals the total amount Erin takes home after subtracting expenses from her revenue, but before taking into account any taxes or interest on debt she needs to pay.
Income tax expense is the cost of estimated income tax paid or owed for the reporting period. Along with interest payments (which Erin doesn’t have), this is part of the IT in EBITDA.
Net profit is the total amount the business has earned, after taking all expenses into account, including tax and interest.
Not every small business uses cash flow statements. But if you use the accrual method of accounting, a statement of cash flows is essential for measuring your financial health.
With the accrual method, expenses and income are recorded on the books when they’re incurred, not when the money actually changes hands. For instance, you may place a $1,000 order to a vendor; in that case, you’d immediately record it as a $1,000 expense—even if you won’t send money to the vendor until later, after you get an invoice.
Similarly, you may invoice a client $1,000, and record that as $1,000 accounts receivable, an asset. But you don’t actually have the money on hand yet—so, if you were to try and use it for a $1,000 purchase, the money wouldn’t be there.
A cash flow statement reverses those transactions where you don’t actually have cash on hand, so you get a real idea of how much cash you have to work with during a period of time.
Keep in mind that numbers in brackets are subtractions of cash—you can read them as negative numbers. Numbers without brackets are additions.
Cash, beginning of period is the cash Suraya had on hand at the beginning of the month.
Net income is her total income for the month. Some or all of that income may be subtracted on the cash flow statement, depending how much of it is in accounts receivable (not paid) or in the bank (paid).
Additions to cash reverse expenses that are listed on the books, but haven’t been paid out yet. For instance, the $500 in accounts payable is money Suraya owes, but hasn’t paid. And the $200 depreciation is symbolic, for accounting purchases—she already paid out that $200 as part of the total cost of the asset she’s depreciating.
Subtractions from cash reverse any transactions that were recorded as revenue for the month, but not actually received. In this case, it’s $1,000 in accounts receivable.
Suraya’s net cash from operating activities is $700, meaning $700 cash came into her business during the month.
Cash flow from investing activities covers assets like real estate, equipment, or securities. Suraya bought a $500 sewing machine this month—an investment. This is recorded on the books as a $500 increase to her equipment account. However, she spent $500 cash to get it—meaning, the total cost needs to be subtracted.
Cash flow from financing activities lists money earned collecting interest on loans, credit, and other debt. It can also include draws or additional capital contributions from the business owner.
Cash flow for month ending March 31, 2020 is $200. That’s Suraya’s total cash flow from operations ($700) minus the cash she spent on equipment ($500). In total, she had $200 cash come into her business this month.
Cash at end of period is $2,200—her starting cash amount, plus the money she earned this month
- Current Ratio: This is calculated as current assets / current liabilities. A higher current ratio indicates better liquidity.
- Quick Ratio: Also known as the acid-test ratio, it is calculated as (current assets – inventory) / current liabilities. This ratio gives a more conservative view of a company’s liquidity by excluding inventory, which might not be easily convertible to cash.
- Debt-to-Equity Ratio: This is calculated as total debt / total equity. A higher ratio indicates higher financial risk due to a higher proportion of debt.
- Debt Ratio: This shows the proportion of a company’s assets financed by debt and is calculated as total debt / total assets. A lower debt ratio usually means lower financial risk.
- Gross Profit Margin: Calculated as (revenue – cost of goods sold) / revenue, this ratio indicates the percentage of revenue left after covering the cost of goods sold.
- Net Profit Margin: This is calculated as net income / revenue and shows the percentage of revenue that becomes net profit after accounting for all expenses, taxes, and interest.
- Return on Equity (ROE): Measured as net income / total equity, ROE indicates how effectively a company is using its equity to generate profit.
- Inventory Turnover: This ratio is calculated as cost of goods sold / average inventory. A higher inventory turnover ratio indicates better inventory management.
- Receivables Turnover: Calculated as net revenue / average accounts receivable, it indicates how effectively a company is issuing credit and collecting debts from its customers.
- Earnings Per Share (EPS): Calculated as net income / total shares outstanding, this ratio shows the earnings attributed to each share of a company’s stock.
- Price-to-Earnings (P/E) Ratio: This is calculated as stock price / earnings per share. A P/E ratio helps investors understand if a stock is over- or under-priced relative to its earnings is.
a) NISM Series I: Currency Derivatives Certification Examination
d) NISM-SeriesV-B: Mutual Fund Foundation Certification Examination
a) Important Stock Websites and Channels to Refer For Stock Market News :–
A) MoneyControl.com
B) Economictime.com
C) Zerodha.com
D) AngelOne.in
E) Screener.in
F) tradingview.com
G) Tickertape.in
H) Fullratio.com
I) Equitypandit.com
J) Topstockresearch.com
K) Bloomberg
L) CNBC
M) The Financial Times
N) Yahoo Finance
O) Reuters
P) Forbes
Q) Investing.com
R) The Motley fool
S) The street
T) This is Money
1) Bespoke Investment Group
2) MarketWatch
3) CNBC
4) Benzinga
5) The New York Times Businesses
1) Other Sources to Look for Financial News
Podcasts
Youtube Videos
WATCHLISTS
1) The Richest Man in Babylon –By George S .Clason
2) Rich Dad and Poor Dad – By Robert Kiyosaki
3) Your Money or your Life — By Viki Robin
4) The Intelligent Investor — By Benjamin Grahim
5) The millionaire Fast lane — By MJ Demarco
6) The science of getting rich — By Wallace Wattle
7) The millionaire Next Door — By Thomas Stanley and William Danko
8) Total Money Makeover — By Dave Ramsey
9) The Money Book for young , Fabulous and Broke — By Suze orman
10) Secrets of Millionaire mind — T.Harv Eker
