Which Investment Strategy Is Best for You?

Investors have been perennially fascinated with the potential of equities market in terms of growth and performance. However, short-term market volatility and unpredictable price movements of stocks have time and again proved this fascination to be a fickle thing at its best. That is, if the investor does not follow a predefined strategy and tries to evolve his approach as he gets exposure to the market.

Depending on personal risk appetite and preferences, an individual might adopt a defensive or aggressive investment strategy and work towards achieving his or her financial goals. Developing an investment portfolio is the key to managing your investments in an intelligent manner. Investing solely in equities would not be advisable, instead, one should invest proportionately in bonds, debentures and stocks and the proportion would depend largely on the risk tolerance and a host of other factors for stock market investors.

A defensive investor would always try to seek a balanced diversification of investment portfolio and devote a larger proportion of resources to fixed-income securities and debt instruments which are comparatively safe avenues and invest only a low proportion in high-risk equities. On the other hand, an aggressive investor would invest a greater proportion of his investments to high-risk equities and try to take advantage of every opportunity presented by the market to profit from his investments.

However, it is not advisable to go in for day trading for aggressive investors because it can drain the energy of an individual very quickly with comparatively little gains to make. Experts suggest that most of the well-known investors are those who have learnt to discipline their instincts and those who invest for the longer term for substantial gains to be had from the same. Most of the people, both defensive and aggressive investors, tend to sell when the market goes into a downturn spiral and start buying heavily when the market moves up.

Lowest brokerage in india : Open a Demat Account and Invest for Financial Secu...

Lowest brokerage in india : Open a Demat Account and Invest for Financial Secu...: With constantly rising cost of living, education and healthcare due to rising inflation and taxes, financial planning has acquired greater...

Open a Demat Account and Invest for Financial Security

With constantly rising cost of living, education and healthcare due to rising inflation and taxes, financial planning has acquired greater significance than ever before to secure your financial future. While you may think that keeping a little amount aside for the rainy day might help but the fact is that this money keeps losing its purchasing power over the years and your future security is going down the drain with it.

To ensure that your savings at least retain the original purchasing power when you put them aside you need to explore healthy investment options to help grow this money in an intelligent manner. It would not be enough to go in for fixed deposit schemes or buy some fixed-income securities because when you factor in for inflation and taxes at the time of maturity, you may find that you got even lesser than what you kept aside.

To avoid such a situation, you need to consider alternativein vestment options which can bring in higher returns without escalating the level of risk beyond your tolerance levels. The best option to multiply your savings would be to invest in equities but they also involve a higher level of risk but if one opts for mutual funds they can offer a good level of returns without increasing the risk level that much. However, it requires choosing a mutual fund which suits your individual requirements well enough.

Arbitrage Offers A Low-Risk Strategy for Online Trading

There are many strategies which can be employed for online trading but it always remains a contagious issue to minimize the risks involved and generally, the higher the risks, greater are the rewards. It is here that the concept of arbitrage comes into the picture. Arbitrage represents a unique approach in which a specific asset being traded on more than one market is bought at one market and sold at another for a higher price at the same time. This method works because of a certain discrepancy which exists in the prices for any particular stock between two exchanges due to pricing inefficiencies. An arbitrager in essence attempts to identify these arbitraging opportunities and utilizes them to his advantage.

However, this discrepancy is too small to make any real gains so the trader buys in bulk and sells off in another market immediately to profit from this small difference in price. This is known as pure arbitrage and presents a strategy for online trading with minimal amount of risk involved. This strategy can be successfully employed in equities, commodities or forex market without much issue. It is especially useful in forex market where a trader with quick reflexes can identify arbitrage opportunities by tracking real-time prices of various currency pairs and act swiftly to make some good gains.

It is essential to act upon these opportunities without losing time because these arbitrage trades tend to correct the price inefficiencies which created them in the first place. However, market makers can steal the show from retail traders when it comes to arbitraging. This is so because successful arbitrage requires a good amount of capital to convert the small price difference into desirable gains which makes it a little difficult for the average retail trader.

The trader needs to have a great amount of skill and knowledge about online trading along with an ability to keep updated constantly with any factors in and outside of market which can have an impact on the movement in stock markets. Last but not the least; it requires access to efficient trading software with an eye for good trades. Apart from pure arbitrage, there is another type of arbitrage which is very attractive but risky as well. Aptly, this is known as risk arbitrage. This type of arbitrage usually involves trading with a view to take advantage of any prospective or underway merger or acquisition which can bring a sudden change in the price of stocks.

If you wish to try your hand at arbitraging, you can open a free demat account with Ashlar Online and begin online trading through us. With years of expertise and exposure in the field, we will be able to guide you better and help you manage your risks in an efficient manner to become a successful trader. 

What Today's Stock Market Plunge Tells You About 2016

Don’t panic, yet.

When it comes to the stock market, first impressions are not as lasting as it seems. That’s the good news, perhaps the only, from the first day of trading of 2016.

Investors hoping to start the New Year on a new page were disappointed on Monday. The stock market fell big on the first day of trading for 2016. The Dow Jones Industrial Average dropped 276 points, or 1.6%. And the S&P 500 was down 31 points.

That gave 2016 the worst first day of trading since 2001, and the sixth worst start of all time, according to Standard & Poor’s analyst Howard Silverblatt.

But here’s the thing: The first day of the year tends to be a pretty lousy indicator of where stocks are headed for the next 251 days of trading. It’s basically a coin toss. The first day of trading has only been an accurate predictor of the direction of the market fort whole year 51% of the time.

Investors are better off waiting to see what stocks do for the rest of the month. But even using January as an indicator is flawed. According to S&P, for 72% of the time, the first month of the year is an accurate indicator of what stocks will do for the entire year. In other words, if stocks end the entire month of January down, there’s a nearly 75% chance that the market will finish 2016 in the red.

Currently, stock market values, as measured by earnings, are historically high. Corporate profits have been weak. The Federal Reserve is raising interest rates. And commodities prices suggest that global growth will be anemic.

All of those are good reasons to believe that 2016 will be disappointing for investors. The fact that stocks have dropped, though, even a lot, on the first day of trading of 2016, is not.