How to Analyze Stocks to Get Good Returns

How to Analyze Stocks to Get Good Returns

There is an old saying “Look before you leap” and this fits perfectly when you are investing in stocks. However, in-stock investment, mere looking won’t be enough, you need to dig deeper using multiple analytical tools and resources, and techniques for making your investments full-proof. 

The stock analysis involves multiple techniques to find out whether an investment is right for your portfolio or not. If you are a trader, then you can use technical analysis tools to find yourself the best stocks to trade for the day. 

Investing in stocks without thorough research about the company, stock price, and market trend can lead to a huge loss. For a good investment, you need to know about the stock you are putting your money into.

This is quite similar to buying an expensive asset, for instance, a car. Don’t you compare multiple cars within your budget and then choose the one which suits your requirement the best?

Stock investment is nothing different, you need to find the best stocks for your investment goals and profile and you need stock market analysis techniques for the same. 

In this article, you will find different aspects of stock analysis. The article will have different stock market analysis techniques, metrics, and tips for investors, stock analysts, and anyone who wants to learn about stock market analysis.


Steps by step process on how to analyze a stock

Stock analysis is a process and involves multiple steps. It starts with the collection of data from different company documents and then finding the required information from them. T

hen comparing that information and analyzing multiple metrics and risks involved in the stock investment.

The steps are discussed in detail below – 


1) Collection of financial data and company information 


The first step in stock analysis involves document research. You need to pull out multiple documents that the company files with SEBI. The documents should include financial reports – quarterly, annual, and other financial data.

The balance sheet, P/L statement, and the cash flow statement of the company are key documents that need to be studied for qualitative research.

This will help you find out the revenue they are generating, their expenses, profit, and how they are handling cash flow. These documents are the basic requirement for beginning your research.

If you are not able to find the documents by yourself, you can ask your broker to find them for you. Often you can find the financial reports on the trading terminal you are using as a brokerage house upload the same on the trading software.

However, you can find them easily on the company’s website anytime. 



  • Choice of analysis                                                               

The next step is to decide whether you want to do fundamental analysis or technical analysis. This choice depends on whether you are trading stocks or investing in them.

If you are investing for a longer duration, you must go for fundamental research, and if trading, then technical analysis with a bit of knowledge about the company financials can help. 


a) Fundamental analysis:


Fundamental analysis of stocks is about finding the intrinsic value of the stock and evaluating whether it is overvalued or undervalued. It is assumed that the market value of the share doesn’t always reflect the actual value of the company.

So, fundamental research is performed to find the right value. If the share is undervalued, then there is a scope for investment.

Fundamental analysis can be further categorized under two section namely – 


i) Quantitative analysis involves the numbers and ratios that can be obtained from the financial statements of the company. For instance, the profit, revenue, sales numbers, or the P/E ratio or debt/equity ratio, and others.

This analysis can be very simple as well as highly complicated given the nature of the data you are analyzing. Quantitative fundamental analysis helps in understanding the entry and exit points in the stock market.



ii) Qualitative analysis involves the factors that affect share price but cannot be expressed in numerical form. For instance, management decisions, competition in the industry, the performance of the directors in the company, and other similar factors.

Decisions taken by the management can easily swing the price of the share but these factors intangible, unlike quantitative factors. However, qualitative analysis is also crucial for evaluating the value of the share.


There are multiple components of fundamental analysis which you need to be aware of before you start analyzing the stocks. They are – 

  • Earnings per share or EPS which measures the profitability of the company
  • Price to Earnings Ratio or P/E ratio which tells about the valuation of the share is correct or not. 
  • Price to Book Ratio or P/B Ratio which is also used for finding the valuation of the company. 
  • Debt to Equity Ratio or D/E ratio that says about the indebtedness of the company.
  • Return on Equity or ROE tells about the profit generated using the equity invested by the shareholders. 

There are other metrics that we will be discussing in detail in the latter part of the article. 

Now let us see how to do fundamental analysis or how you can find the intrinsic value of the share which is the primary goal of fundamental analysis.

So, there are three processes out of which you can choose the one that suits your requirement. 


i) Relative Value Models (Multiplier)

If the company is pretty new, or you are not able to fetch all the details about the company then you can opt for relative valuation. In this process, the market price of the share of its peer companies is first taken into consideration.

Then the price is compared to the peer company’s fundamentals like sales number, net income, or book value of equity. The ratio which is obtained is applied to the company you are researching.

These ratios are known as price multiples and can be used for finding out the relative value of the question share.



ii) Present Value Models

This is a discounted cash flow method where the projected future earnings are discounted by a specific rate to get the present value of the share.

Apart from free cash flow, dividends or residual income can also be discounted for finding the value of the shares.

This is the most popular method of finding the intrinsic value of shares under fundamental analysis.



iii) Asset-based Valuation:

Finally, we have asset-based valuation which involves the company’s assets and liabilities. The market of total liability of the company (excluding equity) is deducted from the total value of the asset of the company to derive the value of total equity.

However, this is an obsolete and rarely used method. 


In fundamental analysis, you need to keep few things in mind apart from finding the intrinsic value. You need to – 

  • Check and analyze the prospects of the company, its business plans, expansion ideas, and others. 
  • Check the debt of the company and also compare the same with the peer companies. 
  • A study of the rival companies is necessary for fundamental analysis.

b) Technical Analysis:


This analysis involves market price movement, historical prices of the stock, and other statistics available in the stock market itself. if you are wondering how to do technical analysis of stocks, then here are few insights about the same. 


The basic idea behind Technical analysis is to identify the market trend and predict whether the price is going to increase or fall. Here, historical data are used for predicting future prices. 

Some of the most popular technical analysis tools include – 

i) Moving Average:

This is used for understanding the average price movement in the stock. It is tough to keep a track of the original price movement daily, so taking an average helps. You can use the simple moving average or the exponential moving average.

While the former is calculated by taking the closing prices of the stock for a given period and summing them up and then dividing it by the number of days for which the prices are included.

The latter uses the weighted-average method and prioritizes the recent prices a little more by weighing them more.


ii) Support and Resistance levels:

These are used to understand the price trend of the share. Whether the stock is bullish or bearish.

If the support level is broken, which is the lower end of the price (the demand is high enough to keep the price above this level) then the stock is being bearish and can fall drastically.

On the other hand, the resistance level is about the maximum price level where the selling pressure is maximum and if that is broken, then the stock becomes bullish and can increase in price exponentially.


iii) Charts and trading indicators:

There are multiple charts which include candlestick charts, line charts, bar charts, and others to understand the trend in the market and for the stock in question. The charts along with trading indicators can help you understand the entry and exit points in the market. 


There are many other different factors and tools which are put to use by the traders for stock analysis. 


  • Metrics for analysis

In the above two-section, you have read a little about the metrics which are used to determine the price of stock while performing stock analysis. Here we will discuss the most important metrics which are used in the analysis process of stocks. 


  • P/E ratio:
    Price to earnings ratio is one of the most important metrics that are used by analysts for stock analysis. This is derived by dividing the market price of the share by its earning per share/EPS.This is used for comparing companies within the same industry and having similar prospects in terms of growth and revenue generation. This metric suggests the amount of amount (share price) the investor is willing to pay for earning $1 out of the company’s recent earnings.This metric might be a little flawed as well as analysts often focus on the short-term, so better use other metrics along with the P/E ratio for correct evaluation.


  • Revenue:
    It is the value which the company has earned in a specific duration say in a year by selling its products or services.
    Revenue is another top metric that needs to be analyzed when researching the stock/company as it says a lot about the company’s operation. Revenue can be divided into operating and non-operating revenue.Operating revenue is generated from the business the company does and thus it tells about how well the year went in terms of sales and profit generation.
  • EPS:
    Earning Per Share is one of the crucial metrics that are regarded as stock market fundamentals and it is derived by dividing the recent earnings (net income) of the company by its outstanding shares (shares available for trading in the stock market).
    EPS helps in comparing the company’s profitability with other companies as the earning is divided into the number of shares. However, this earning can include the dividend as well which the company may not pay to the shareholders.In such a case, automatically the EPS increases but then it doesn’t show a perfect picture of the profitability of the company as the shareholders are being deprived.
  • Net Income:
    This is the amount that is left after paying all the operating expenses, depreciation, and taxes out of the revenue generated. So, if this number is increasing on a year-on-year basis, then the company is growing and vice versa.
  • ROE:
    Return on Equity helps you understand how much the company can generate with the shareholder’s equity. It is expressed in percentage and derived by dividing Net income by shareholder’s equity.
  • ROA:
    Return on Asset is the profit generated by using the asset of the company. it is also expressed in percentage and derived by dividing the net income by the value of the total asset of the company.
  • P/B Ratio:
    Price to Book Value or ratio helps investors find the high-growth companies which are undervalued.
    This ratio is derived by diving the market price of the share by the book value of the company.Book value means the total amount that can be retrieved if all the assets of the company are sold and the liabilities are paid off.
  • PEG Ratio:
    This ratio is about the price to earnings growth which tells us about the growth in earning of the company and the stock is considered to be valuable if this ratio is less than 1. It is derived by dividing the P/E ratio by the growth rate of twelve months. 



c) Market analysis:

Stock analysis is beyond numbers. If you want to thoroughly analyze the stock and the company, you need to focus on the below-mentioned factors as well – 

i) Competitive Advantage:

Long-term investors want assurance of the durable competitive advantage of the company. Whether the company can sustain itself in the long-run or not, whether its parent company can protect it if such a scenario arises, pricing power and many other factors are being considered before investment.


ii) Market trends:

Industry or market trend plays a great role in the stock price movement. If the industry has the potential to grow in the future, then the stocks in it would share the same or at least a part of its growth.

For instance, the industries which are expected to outgrow others in the future include Artificial intelligence, fintech, healthcare, cloud computing, and similar industries. So, investing in the stocks of these industries can be profitable in the long-run.

iii) Analysis of the management:

Finally, one of the most important thing that the investor and the analysts need to consider is management’s performance.

A company is run by the management and thus their experience, performance, expertise needs to be carefully analyzed.


iv) Risk analysis:

Whether you opt for fundamental analysis or technical, you need to do risk analysis before actually investing in the stock.

You need to analyze the risks of investment such as the emergence of a potential competitor, new technology making the business obsolete, or poor decisions by management and others. All these negatively affect the business and thus you need to have a provision in your investment plan for the same.

v) Putting everything together:

So, once you have done your research, it is time to put everything on the platter and evaluate and take the call. You need to have the context right and put your research together according to the context of your investment.

If you are looking for long-term investment, you need to check the durable competitive advantage, management’s performance, along with quantitative metrics. If you are looking for a short-term investment, then the numerical metrics can be enough along with market trend analysis. 



Stock analysis is a non-negotiable factor while investing in stocks. If you are wondering how to analyse stocks by yourself, then you can follow the above-mentioned steps and you can conduct your research.

There are innumerable metrics that you can put to use but you need to relate your research to your investment goal and for that, you need to find the context of investment right.

Both quantitative and qualitative factors hold equal importance while investing and thus you cannot overlook either. 

How to buy unlisted shares?

How to buy unlisted shares?

The equity share capital of a company is the way the company raises funds for establishment, growth and development. If the company lists itself on the stock exchange, it becomes a publicly-traded company.

Its equity share capital gets listed on the BSE and/or NSE from where it can be freely traded across retail and institutional investors. If you invest in the shares of a listed company, you would get listed shares. 

There is another category of shares that also constitute the equity share capital of a company. Such shares are called unlisted shares.

Unlisted shares are also called pre IPO shares because they are issued by companies before the company launches its IPO and goes public. Common examples of unlisted shares include shares of Reliance OYO, Jio, One97 Communications, etc.

Unlike listed shares, unlisted shares are not listed on any stock exchange. You would have to invest in these shares through other non-conventional modes.

There are different ways in which you can buy unlisted shares of a company. However, before we delve into the ways of buying unlisted shares, let’s understand the different aspects of investing in them.


Why unlisted shares attract investors?

Unlisted shares are, usually, offered by those companies that are in the initial stages of development. Companies that use innovative ideas to generate revenue can grow up to become established players.

For example, Ola is a cab-aggregator platform that has revolutionized the concept of public travel. Within a short span of launching itself, Ola has become a known and preferred mode of public commute. Thus, to invest in companies that are innovatively revolutionizing their market, investors invest in unlisted shares.

Another reason for investing in unlisted shares is when the company offering the shares is a subsidiary of a large and reputed company or group. For example, Reliance Jio is a subsidiary of Reliance which is a reputed Indian conglomerate.


So, if investors trust the subsidiaries based on the parent company, and expect the subsidiaries to provide returns on investments, they would invest in unlisted shares.

So, for investing in innovative ideas or in businesses that have a lot of potentials, investors choose to invest in unlisted shares.


Things to know before investing in unlisted shares

Unlisted shares in India are greatly different from the listed shares. So, before you invest in them, here are a few things that you should know about –


  • The process of investment

While buying listed shares includes a quick purchase through the demat account within trading hours, investing in unlisted shares is a tad bit difficult. It takes some time and you might not be able to buy an unlisted share instantly.


  • Who owns the shares?

Unlisted shares are owned by employees, angel investors, venture capitalists or start-ups and intermediaries. Thus, you would have to use unconventional modes to invest in such shares.


  • Liquidity

Finding buyers of unlisted shares proves to be difficult since these shares are not publicly traded. Thus, when you invest in unlisted shares, you might find them illiquid when you want to redeem them.


  • Underlying risk

Unlisted shares are risky compared to listed shares. This is primarily because the shares belong to companies that are in their growth stages. Such companies might suffer considerable losses in a bad phase making unlisted shares risky.


  • Valuation of the shares

Since the shares are not listed on the stock exchange, they do not carry a market value. Unlisted shares are valued using the concept of fair value which is calculated by the investors and promoters of the company. Such a value might not be very reliable and so, it might prove to be risky.


  • Transparency

There is limited or no transparency in the company’s financial position that offers unlisted shares.


  • Tax treatment

Tax treatment of unlisted shares is also different. If you stay invested in unlisted shares for two years and above, the returns earned would qualify for long term capital gains. You would be taxed @20% with indexation benefit on returns earned if you sell the shares after two years. If you are a Non-Resident Indian (NRI), you would be taxed @10% on long term capital gains without the benefit of indexation. If, however, you sell the shares earlier, i.e. within 24 months, short term capital gains would be applicable. The returns earned would, then, be taxed at your income tax slab rates.


  • Setting off of capital losses

If you sell unlisted shares within 24 months and you incur a loss, such a loss would be called a short term capital loss. This loss can be set off against short term capital gains and/or long term capital gains.

You can also carry forward this loss for 8 years to set it off against short term capital gains and/or long term capital gains. 

If you sell unlisted shares after 24 months and incur a loss, the loss would be termed as long term capital loss. This loss can be set off against long term capital gains only. Moreover, you can carry forward this loss for the next 8 years and set it off against long term capital gains in those years.

You should, therefore, know these aspects of investing in unlisted shares before you invest in them.


How to buy unlisted shares?

Now let’s delve back into the different ways in which you can buy unlisted shares. These ways are discussed below –


  • Through intermediaries and start-ups

Specialized start-ups have been created to offer investments into unlisted shares. You can buy unlisted shares through these start-ups by opening a demat account with them.

Usually, a minimum investment of Rs.50, 000 is needed to invest in the unlisted share of each company. You have to make the investment upfront but the delivery of the shares is done on the basis of T+3, i.e., after three days of buying the shares.

Pro Tip: Since the delivery is done after a few days, there is a counterparty risk involved in buying unlisted shares through this mode.

You have to transfer the amount for buying the shares but the delivery of the same is not guaranteed. Keep this point in mind if you choose to invest in unlisted shares through start-ups or intermediaries.


  • From the employees of the company

Start-ups, when hiring employees, usually offer Employee Stock Ownership Plans (ESOPs). This allows employees to have equity ownership in the company that they join. ESOPs allow employees to buy shares of the company at a pre-determined price and after a predefined time. 

So, if the employees want to offer their unlisted shares for sale, you can buy the shares from them. To do so you need to contact your broker. Your broker knows which unlisted shares come up for sale and can help you buy the shares from employees offering their stake for sale.


  • From the promoters of the company

Many times the promoters place their stake in the company for sale. This is done through a process called Private Placement and the unlisted shares are placed with banks and wealth managers.

You can, then, invest in unlisted shares through Private Placements done by the company’s promoters.

Pro Tip: To invest through Private Placement you need a good network to find out when such placements are made. Moreover, if you are looking to own a considerable stake in the company, you can do so through this mode since promoters usually own a large stake in the company that they promote.

For doing so, however, you would need a considerable size of the investment.


  • By investing in PMS or AIF

If you are a large investor, looking to invest a considerable amount of money in PMS (Portfolio Management Services) or AIF (Alternative Investment Funds), you can get unlisted shares.

Financial institutions that manage a PMS or AIF scheme usually invest in unlisted shares. These institutions bank on the pre IPO share valuation to earn returns when the company lists itself and launches its IPO.

Since the pre IPO valuation is lower, PMS and AIF funds get a large number of shares and generate profits when the valuation rises due to a subsequent IPO.

Pro tip: PMS and AIF are niche investment categories for HNIs, NRIs and foreign investors since they involve a considerable amount of funds. This mode is suitable for you only if you are a large investor and don’t mind taking the risk of investing in unlisted shares.

Furthermore, though fund managers bank upon the increase in the valuation of shares after the IPO is launched, their speculation might not always work. In some cases, the company’s valuation might suffer after it becomes a publicly listed company and the unlisted shares prices might fall causing losses. So, keep the risks in mind when considering PMS and AIF and investing a large chunk of your money in unlisted shares.


  • Through equity crowdfunding platforms

There are various crowdfunding platforms that allow you to invest in the equity capital of unlisted companies. You can become an angel investor, invest in angel funds and buy unlisted shares of companies registered on such crowdfunding platforms.

Pro tip: When you invest in the business through crowdfunding, you are helping the business venture startup. It involves a considerable risk if the venture fails or is not able to establish itself. Thus, you should keep this investment risk in mind when investing through crowdfunding platforms.


Mistakes to avoid when investing in unlisted shares

If you are not careful, you might end up making mistakes when investing in unlisted shares. Such mistakes would be costly as you might block your capital, incur opportunity costs and even incur a loss if the shares are devalued.

So, here are some pitfalls that you should avoid –

  • Don’t follow the herd mentality. Research the company before you invest in it. If the company is establishing itself in the market, has reputed promoters and strong financial fundamentals, you can invest in the unlisted shares of such companies
  • If you are getting unlisted shares at a discount by existing investors, don’t jump on the chance. There is a reason investors are exiting from their investments. Research the shares and then invest
  • Prices of unlisted shares fluctuate considerably. In case of major fluctuations, assess the fair value of the share based on the company’s prospects
  • Do not invest in unlisted shares with a short-term investment horizon. Remember, unlisted shares prove their mettle with time when the company grows and establishes itself in the market. Have patience and a long term perspective if you want to invest in unlisted shares. If you believe in intra-day trading, steer away from unlisted shares as they are not relevant for your investment needs
  • Do not invest in unlisted shares without a trusted advisor to guide you. If you need advisory services you can get in touch with Koppr’s experts who would help you buy suitable unlisted shares that have the most potential to yield returns.


Investing in unlisted shares through Koppr

Koppr also allows you to invest in unlisted shares of various companies. You can buy unlisted shares online in some simple steps through Koppr’s platform. Let’s have a look at the steps in details –

1) Visit and click on ‘Sign In’ in the upper right-hand corner of the home page. If you are logging in to Koppr for the first time, you need to sign up with your credentials and create your own login ID and password.








2) On the next page, sign in to your Koppr account using your registered email ID and password which you had used to create your login ID.

login to koppr account








3) If you are new to Koppr, you can choose ‘Sign Up’ on the home page and create your own account. Provide your first and last name, email ID and set a password to create a new account on Koppr.

koppr signup








4) There are 4 sections in your Koppr Account- Learn, Plan, Track, Act. The different sections are for different parts of your financial journey.

Koppr Dashboard









5) On your account’s dashboard, click on ‘Act’ on the left-hand side of the screen

koppr act










6) You would be able to see a choice of unlisted shares of different companies that are currently active on the platform.

invest in unlisted stocks









7) Click on ‘I AM Interested’ to check the details of the scheme in which you want to invest.


8) Click on ‘I Am Interested’ and someone from the Koppr team would get back to you with the details of how you can invest in the selected scheme. 

You can, then, invest as per your needs and buy unlisted shares online.

Understand the meaning of unlisted shares, how they work, the aspects of investing in them and then choose the preferred avenue to invest in them.

You can also buy unlisted shares from Koppr in a hassle-free manner. However you invest, remember how unlisted shares are different from listed ones and invest in them with full knowledge of their risks and returns. 

Here’s Where to Invest your Money in 2021 – Recommended by Certified Financial Planner

Here’s Where to Invest your Money in 2021 – Recommended by Certified Financial Planner

The year 2020 passed in a blur. While it started on a positive note, the Coronavirus pandemic and the subsequent lockdowns brought about an economic slowdown in the country.
Even the financial markets buckled under the global effect of the pandemic. The BSE and NSE, which were at their highest values at 42,273 and 12,362 in the first month of January, fell by 38% when the pandemic struck.
The tourism, hospitality and entertainment sectors also fell by more than 40% due to lockdowns and transportation restrictions. (Source: Though the markets are regaining their luster slowly, investors are confused about where to invest in 2021for maximum gains. What do you think?
Though 2020 was a roller-coaster, investors are eyeing the year 2021 with hope. Investment in 2021 is primarily guided by the recovery of the financial markets after the pandemic as the industry is waking up and normalcy is being restored.
Certified financial planners have also pitched in their recommendations for investments in 2021. Here are, therefore, some of the lucrative investment opportunities for 2021

Here Where to Invest Your Money in 2021:


1) Invest in Direct Equity

For most risk-loving investors, stock trading and investing into direct equity always holds attraction. Even though the equity market suffered losses in the beginning half of 2020 on the pandemic fears, the market is correcting itself and as of the market closing time on 27th November 2020, the NSE and BSE are already at their pre-COVID levels of 12,968.95 and 44,149.72 respectively. (Source:

The boost in the stock exchange was largely due to the promise of the COVID vaccine which is almost in its ready stages. This has resulted in positive market sentiments globally and so, direct equity is once again looking good.

Moreover, history has been a witness that the stock market always bounces back even after a crash, whether it was the Harshad Mehta scam or the 2008 crash. If you invest over a long term period, direct equity is known to yield exponential returns.


Have a look at how the stock market has performed over the last 30 years –

Sensex in last 30 years









The stock market is, therefore, a good avenue, if you are looking at where to invest money in 2021. If you have the appetite to undertake risks it can be a good start for your investments in 2021.

Here’s a FREE certification course on Stock Market

2) Invest in Mutual Funds

For investors who do not like direct exposure to equity but want to invest in a diversified portfolio, mutual funds are the best solutions. Mutual funds are beneficial because –

  • They help you own a diversified portfolio
  • They come in different variants and you can choose a scheme which is relevant to your investment preference and risk appetite
  • ELSS funds allow you the benefit of tax saving on your investments
  • They are professionally managed allowing you to invest in the best stocks and instruments
  • You can invest in mutual fund schemes with as low as Rs.500 making them ideal for small-time investors too who want market-exposure with limited savings

Given these benefits, the mutual fund market is another avenue which you can explore. In fact, equity mutual funds are less risky compared to direct equity because of the diversification that they provide.


As far as returns are concerned, some equity funds have even outperformed the stock market in several instances. For example, Invesco India’s Growth Opportunities Fund, a large and mid-cap fund, has consistently outperformed the S & P BSE Index over the years. Have a look –

S & P BSE Index over the years








So, as far as returns are concerned, you don’t have to worry. You can also choose SIPs to invest every month in a disciplined manner and build up a substantial corpus over a long term horizon.


In fact, the mutual fund industry has become so popular, that investors are increasingly investing in the avenue to bank upon its returns. The AUM of the mutual fund industry has, therefore, consistently grown over the years –

mutual funds assets under management









So, consider investing in different schemes of mutual funds to create a diversified portfolio which is liquid, tax saving and also return generating.


Take a FREE certification course on Mutual Funds

3) Invest in National Pension System (NPS)

Have you invested in the National Pension System introduced by the Government? If not, you can consider it in 2021. The reasons? Let’s see –

#1 – It helps you create an earmarked corpus for retirement

#2 – The scheme is market-linked promising inflation-adjusted returns

#3 – You get lifelong incomes in the form of pension after maturity

#4 – Investments into the scheme are tax-free under Section 80CCD (1B) up to Rs.1.5 lakhs

#5 – Additional investments, up to Rs.50, 000 can be claimed as a deduction under Section 80 CCD (1B)

Moreover, if you choose the new tax regime and if your employer contributes to the NPS scheme on your behalf, such contributions would be allowed as a deduction from your taxable income for up to 10% of your basic salary and dearness allowance under Section 80CCD (2).

Besides the market-linked returns, the additional tax benefit, both under the old tax regime and the new one, tilts the scales in favour of the NPS scheme.


You can invest in the scheme for long term capital accumulation for your retirement. On maturity, you would be allowed to withdraw up to 60% of the accumulated corpus as tax-free income which would also be tax-free in your hands.

So, if tax-saving and retirement planning is your goal, you cannot go wrong with the NPS scheme.


4) Invest in Fixed Deposits (FD)

This is the avenue for traditional investors who are averse to any kind of market risk and want secured and safe returns. Fixed deposits have been an Indian favourite for a long time and this favour is not going to end anytime soon.

Even though the interest rate on fixed-income instruments, including fixed deposits, has been slashed in recent times, fixed deposits continue to find investors for the safety that they promise.

The popularity of fixed deposit schemes, especially when volatility struck during the pandemic, increased and the trend is expected to continue in 2021.

So, if you want to be safe with your investments, you can choose fixed deposit schemes. However, do not dedicate a large portion of your investment in fixed deposit schemes.

Direct about 5% to 10% of your investment in fixed deposit schemes and the rest should be invested in other market-linked avenues. If you are choosing fixed deposits, here are some tips which you can follow –

  • Invest in 5-year fixed deposit schemes offered by banks and post offices. These schemes allow tax-saving on investment under Section 80C
  • If you want higher returns, opt for fixed deposit schemes offered by NBFCs (Non-Banking Financial Companies)
  • Compare the rate of fixed deposit schemes across institutions and choose the scheme which has the highest rate
  • Do not withdraw your deposits before the completion of the tenure. It would attract a withdrawal penalty which would reduce your interest earnings.

For risk-free returns you can also choose debt mutual funds which would help you earn inflation-adjusted returns and also earn the benefit of indexation if you redeem your funds after 3 years.


5) Invest in Unit Linked Insurance Plans (ULIP)

While the primary objective of insurance plans is to offer financial protection against premature death, Unit Linked Insurance Plans (ULIPs) serve a dual purpose. Besides allowing insurance coverage, these plans also help you create wealth, a la mutual funds.

ULIPs work on the model of mutual funds. The premium that you pay is invested into different funds of your choice. Each of these funds invests in the capital market depending of the fund’s objective.

For example, equity funds invest in equity stocks while debt funds invest in debt instruments. Depending on the growth of the underlying assets, the NAV of the fund grows and you can earn returns on your investments.

In case of death during the policy tenure, you get higher of the sum assured or the fund value and on maturity, the fund value is paid. The distinct advantages of ULIPs are as follows –

  • Invested premiums qualify for tax deduction under Section 80C up to Rs.1.5 lakhs
  • A single policy gives you the option of different types of investment funds to choose from – equity, debt and hybrid. You can invest in one or more funds as you’re your investment preference. Moreover, you can switch between the chosen funds during the policy tenure depending on the market movements. This switching is completely tax-free and almost all ULIPs allow free switches up to a specific number of times
  • Partial withdrawals from the fund value can be made from the 6th policy year. These withdrawals are also completely tax-free in nature
  • The death benefit received is completely tax-free
  • If the premium paid is up to 10% of the sum assured, the maturity benefit received on maturity is also completely tax-free under Section 10 (10D) of the Income Tax Act, 1961

Moreover, the charges involved under ULIPs have also reduced in recent times pitching them as a favourable product against mutual funds.


6) Invest in Real Estate

This avenue is for those investors who want to bank on the growth in the real estate market. In 2019 the real estate market was valued at Rs.12, 000 crores and it is expected to reach Rs.65. 000 crores by 2040.

In 2019, real estate investments amounted to Rs.43, 780 crores and the number is expected to increase in the coming years. (Source: The introduction of RERA, reduced interest rates on home loans and the need to own a house are the major driving factors for the growth of the real estate industry.

Housing is one of the basic needs of individuals and if you want to create an asset, you can explore the real estate market as the pandemic has led to a reduction in the prices which would be good for you.

Moreover, if you avail a home loan to invest in a home, you would be able to avail tax benefits under Sections 80C, 80EEA and 24 on the principal as well as on the interest payable on the loan.

The loan would also improve your credit score and allow you to own your dream house. So, if you have considerable funds at your disposal, opt for real estate either for owning your house or for creation of an asset.

Here’s a complete guide on how to invest in real estate

7) Invest in Gold

Gold is another investment avenue which you can consider if you are looking to hedge against volatility and uncertainty. Gold holds a traditional value for Indian investors as festivities, weddings and gifting is marked with physical gold ornaments and jewellery.

From an investment point of view, however, different avenues are in vogue in recent years with the availability of gold ETFs, gold mutual funds and, the all new, digital gold.

These gold investment avenues are getting much attention because of their safety, liquidity and ease of investing in small amounts.

Here’s a complete guide on how to invest in gold SMARTLY!

When it comes to returns, gold is a safe haven, especially if you are looking for long-term savings. Gold gives cyclical returns and when the markets are volatile, gold is looked upon as a safe investment avenue and its prices surge.

The very recent example is the COVID pandemic wherein the prices of gold jumped in April and May when the pandemic struck India. Moreover, over the last few years, gold has outperformed the Sensex in terms of returns. Have a look –

gold vs silver vs sensex












So, you can consider gold as an investment avenue but invest in Gold ETFs or gold mutual funds for liquidity and safety of storage rather than physical gold. You can also trade in gold through these investment avenues and book returns when the price of gold climbs.

2021 is supposed to be a breath of fresh air for the Indian economy and the financial markets as the effect of the unprecedented COVID pandemic is expected to ebb.

Use the afore-mentioned 2021 investment opportunities and make wise investment choices to grow your wealth especially if the pandemic ate into your portfolio in 2020. Plan your investment strategy for 2021.

Understand the avenues before you choose them and then pick suitable options based on your investment need, financial planning in 2021 and, most importantly, risk profile. Also monitor your portfolio regularly so that you can make changes to it as per your changing financial needs and market dynamics and keep your portfolio profitable in all seasons.


Here’s a FREE financial planning tool to help you with your investments in 2021

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Learn Share Market Basics for Beginners in India

Learn Share Market Basics for Beginners in India

Investing in the stock market is a lucrative choice since equity investments give good returns. However, before you invest in stocks, you should understand what they are, how they work and their important aspects. So, here’s a brief look at the concept of stocks and their different aspects –

What is a share?


In simple terms, share is the per unit capital of a company. If you buy a share, you buy a part of ownership in the company and become a shareholder. The share is tradeable on recognized stock exchanges from where you can buy and sell them. Shares are also called equity shares and they form the equity share capital of a company.


Benefits of a shareholder


When you buy equity shares of a company and become its shareholder, you can enjoy the following benefits –

  • The right to vote in company’s matters and form the Board of Directors
  • Receive dividends from the company which is the profit of the company divided among its shareholders
  • Capital appreciation as the value of the shares rise
  • Bonus shares when the profits of the company are distributed in the form of shares rather than cash dividends
  • The privilege of rights issue wherein you can buy additional shares at a preferential rate
  • Liquidity as shares can be sold easily on a stock exchange
  • Ownership in a listed company
  • Investing in a regulated manner since the share market is regulated by the SEBI

Here’s a complete guide on how to value stocks.


Things to remember when investing in shares


Investment in shares can be beneficial and profitable. However, before you invest, remember these three important things –

Share market investments are prone to high risks because the market is volatile. The value of shares fluctuates wildly. So, you should keep this volatility in mind.

Secondly, you need to invest through authorized stock brokers who charge a brokerage on the amount invested.

Thirdly, stock market investments should be done after you take out some time to research the performance of the stocks that you invest into. This would give you an idea of the performance of the stock and what to expect from it.

Things to remember when investing in shares



How does the stock market work?


To understand how stock markets work, the first thing which you should know is that there are two types of stock markets –

Primary market is where the stock is purchased directly from the issuer or company through IPO (Initial Public Offering) when the share is issued for the first time. Secondary market, on the other hand, is where an already issued stock is bought and sold between shareholders.

The stock exchanges of India, NSE, BSE, etc. are secondary markets. The price of the shares traded on the financial market depends on the demand and supply. If the demand is high, the price would be high and vice-versa.

types of stock markets

Stock Exchange in India


In India, there are two stocks exchanges where stocks are bought and sold – the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE Sensex is a free-float weighted stock market index of 30 of the most well-established companies listed on the BSE.

The Sensex, comprising of 30 of the most actively traded stocks in India, give an economic view of India. The National Stock Exchange, NSE, on the other hand, contains 7 major indices and 15 other indices.

The most popular index of NSE is the S & P CNX Nifty. Nifty 50, short for National Index Fifty, represents the free-float weighted average of 50 of the most well-established companies of India in 17 different sectors.


Investing in Stocks for Beginners


If you are starting your stock investing journey, here are some important tips to keep in mind –

  • Invest with a long term goal for good returns
  • Assess and understand your risk appetite
  • Control your emotions in market fluctuations
  • Expect realistic returns

To buy a stock, you would need a saving account linked with a trading account and a demat account. Buying and selling of shares would be done through the trading account and money for the same should be transferred to the trading account from your saving account. The bought stock would then be held in a demat account.

Here are 7 golden rules of investing in stock markets.

Let’s start planning your finances!

Let's start planning your finances!

The Concepts of Bull and Bear Market


The terms bull market and bear market are commonly used to define the status of the share market. But do you understand what it actually means?

Bull market is that period, in months or years, during which the stock prices are either rising or are expected to rise. It applies to all types of securities being traded on the market like equities, commodities, etc. A bull market reflects positive sentiments and involves considerable volumes of share trading.

A bull market is indicated by the following indicators –

  • Increasing GDP of the country
  • Increase in share prices of companies
  • Employment rate rises

Bear market, on the other hand, refers to the period when the stock prices are declining or expected to decline. It might last a few months or even years. The indicators of bear market are –

  • Decreasing GDP
  • Fall in share prices
  • Decreasing employment rate

Bear market is, therefore, a pessimistic market where share trading volumes reduce.

Risks of Stock Market Investing


Stock trading is fraught with different types of risks which affect the returns which you can earn. These risks include the following –

Type of risk Meaning
Market risk
  • Market risk is the risk of investing in the market. It can be broken down into three types of risks –
  • Equity risk which the risk of varying rates of equity at different times
  • Interest rate risk where the interest rate of a debt instrument might fluctuate and cause a loss
  • Currency risk which is the risk associated with fluctuations in international currency rates
Liquidity risk The risk of not being able to sell the investment when needed
Business risk Risk of business failure due to poor management, bad business decisions, etc.
Taxability risk The risk of changes in the tax regime which imposes tax on investments
Inflationary risk The risk of inflation which would increase the production costs
Regulatory risks The risk of change in regulations which affect a particular company


You should understand and keep these risks in mind before investing the stocks.

Though risky, stock market investments can give you attractive returns and help in wealth creation. So, understand the dynamics of the market and then invest.

For a complete guide to stock investing you can also refer to this course and build your knowledge before you invest in stocks.


Take a FREE Certification Course on Stock Market

Take a FREE Certification Course on Stock Market

The Bulls, The Bears and The Farm – Know The Stock Markets

The Bulls, The Bears and The Farm – Know The Stock Markets

The stock markets have their own version of animal farms. And just like the real jungle, each animal (read investor) has a unique and distinct approach to investing. Let us look at what the stock market farm looks like.
The lead actors of the stock markets

The two most predominant characters are – The Bulls and The Bears.

1) The Bulls

The bulls are investors who have a positive outlook about the market’s future. They believe that the stock prices will go up in the future and so will their wealth! Bulls are often responsible for driving the stock prices higher. They can be easily recognized from the crowd with their optimistic and their “bullish (go-getter) attitude.

2) The Bears

The bears have a 180-degree opposite approach to investing as compared to the bulls. They are sure that the markets are going to head south in the coming future. Bears are pessimistic and can be often found cribbing about the jungle (read market) conditions to anyone willing to listen to them.


Know the 7 Golden rules of stock market investment

The not-so famous character actors

While the bulls and the bears hog the maximum limelight in the stock market farm, there are some other (not so often spoken about) characters as well which deserve your attention.

1) Wolves

Remember the dashing Leonardo DiCaprio in the movie The Wolf of Wall Street? As much as you like him, no one should be a wolf in the stock farm. This is because these type of investors use unethical or criminal ways to make profits. Wolves are the one who are usually responsible for market scams and frauds. We have had some wolves in the Indian stock market as well. Such as Harshad Mehta – the scamster of Dalal Street.

2) Chicken

These investors literally “chicken out” in times of volatility. They are usually fearful of stock price fluctuations and do not prefer to assume risk. Their fear outweighs their desire to earn higher profits. Hence, they stick with conservative investment instruments such as Fixed Deposits, government securities, bonds or such other low-risk, fixed-income generating instruments.

3) Pigs

There is a famous quote by Jim Cramer, a famous investment guru – Bulls and bears make money. But pigs get slaughtered!
Pigs are investors who feel that even a 100% return (over a one-year time period) is not lucrative enough. Such investors are always on the lookout for that “perfect” investment opportunity which will make them a millionaire in a short time period. Their investment decisions are based on market grapevine news or hot tips. They get drawn towards high-risk stocks and invest without putting in adequate time or effort in understanding the company or doing a thorough background research. As a result, they are the ones who land up bleeding most often.

4) Stags

Stags invest only through the IPO (Initial Public Offer) stage. Their objective is to not to remain invested for long. They want to make a quick buck by selling the stocks once they get listed in the exchange market.

5) Sheep

Sheep investors follow the herd and invest in the “most popular” stocks. They do not have their own investment strategy. They follow a leader and do not alter their investment style with changes in market conditions.

6) Ostrich

Whenever faced with a problem, this bird instinctively buries its head in the sand, with the hope that the trouble will go away. This type of investor does the same when there is negative news about their investments. While it may be very tempting to ignore things that are unpleasant to deal with, it is not a great coping (or investment) strategy. This is because you cannot make things better when you refuse to confront them. So, this is one type of investor you should definitely not aim to be.

7) Rabbits

Just like rabbits who keep on hopping from one place to another, these investors are always on the lookout for opportunities to earn quick money. They hold their investments for an extremely short time period (usually in minutes).

8) Turtle

These investors believe in the saying – slow and steady wins the race. They do not make any impulsive investments and trade keeping in mind the long-term. They try to minimize their number of trades and invest significant time and effort in each trade decision. As a result, they are not rattled or worried with short-term fluctuations as they are in it for the long run.

9) Whale

Whales are big investors who have the power to fluctuate the stock price when they trade (buy or sell) in the market. Generally, there are very few such investors. You can benefit a lot by swimming (read trading) along the whales.

Final Words

There is no king in this animal farm. Simply because, markets are cyclical. For instance, although the bears and bulls are endlessly at odds, both of them get their chance to shine and make money as the cycles change. So, you can choose any investment strategy which is in sync with your risk profile (except wolves and ostrich) and you are bound to be a happy animal in the long run.

Here a complete guide on how to invest in stock market for a longer run

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How to Read a Stock Table/Quote? Understanding Stock Quote

How to Read a Stock Table/Quote? Understanding Stock Quote

Recollect the table printed in the business section of newspapers with a lot of numbers that seemed like greek to you? Or those tickers flashing on new channels which seemed to buzz past the screen before you could even blink? They were nothing else but stock quotes and tables. (Thanks to technology, they are available online as well these days)

Stock quotes may seem intimidating at first, but once you understand the data points, you will be surprised with how simple yet effective they are.

Why you should be able to read a stock quote

You need to know the past, to understand the present. When you invest in a stock, you should have information about how its price has behaved (gone up and down) historically. After making sure that the stock qualifies on the checklist (Refer Finding Stocks for Investment), you need to decide on your investment timing as well.

Though we don’t believe that there is one “perfect” time to enter the market, investing at a time when the stock prices are reasonable and have not hit their saturation point is important. One of the most talked about financial strategies is to buy low and then sell high. Stock quotes support you to make these decisions. Even after investing in a stock, you should keep on monitoring their performance and growth on a periodic basis. Again stock quotes will come handy in such reviews.

Bottom Line: Stock quotes give you important insights about the stock’s performance. Without understanding them, you would not have complete information required to make a good buying or selling decision.

Let’s start planning your finances!

Let's start planning your finances!

How to read stock quotes and tables?

In order to read stock quotes, you need to understand its various elements and their implications.

1) Company symbol

Stock tables have limited space that they can dedicate to each stock. Hence, in order to display maximum possible stocks, they display a symbol instead of the company’s name. For instance, Infosys limited is denoted as INFY on the stock table. Usually the stock table lists all stocks in alphabetical order (of symbols).

2) Highs and lows

Share prices keep on fluctuating throughout the course of the market working hours. The stock table mentions the two extreme points – the maximum price and minimum price that the stock traded in a particular day. The price range (difference between these two points) helps you to understand the volatility faced by the stock on a given day.

You can try to co-relate the volatility with the major events that have taken place so as to understand the impact of specific activities on that stock’s market value.

Learn more about How and Why Does a Share Price Rise and Fall?

3) 52-Week High and Low

This column helps you understand the stock’s growth or trading range for a longer time period. It shows the maximum price and the minimum price at which the stock has traded in the last 52 weeks (one year).

4) Close

This column mentions the last price at which the stock was traded that day. For next day trading, you can refer to this close price as a ballpark figure of what you can pay for the stock.

5) Net Change

Net change indicates the growth or degrowth in the stock’s price as compared to the previous day. It is mentioned in absolute terms as well as a percentage of change.

Net change is calculated as:

(Today’s close price less Previous day’s close price) divided by previous day’s close price
When the net change is a positive value, the stock is highlighted in green colour. On the other hand, for a negative change, it is shown in red.

6) Dividend

Dividends play a significant role in stock selection, especially for long term investors. Hence, stock tables provide information regarding the dividend per share or dividend yield so that you can compare it against the stock price. (If the dividend field is blank, it indicates that the company is currently not making any payouts)

Dividend Yield is calculated as Dividend per share divided by Stock price. Higher is the value of dividend yield, higher is the return on your investment.

Read How to invest in stocks in India for trading or long term investment.

7) PE Ratio

You would have come across this financial ratio in the earlier articles as well. It is one of the most commonly used data-point while assessing a stock’s true potential especially in relation to its financial performance. It indicates how much you (as an investor) are paying for every rupee earned by the company.

PE Ratio is calculated as:
Stock price divided by the EPS (Earning per share)
A high PE ratio indicates that the stock is overvalued(costly). Conversely, a low PE ratio indicates that it is undervalued.

8) Trading Volume

This shows the number of shares that were traded in a day. It is expressed in hundred. So, in order to get the actual number, you need to append “00” at the end of the mentioned number. A heavy trading volume is generally followed by a major change (up or down) in the stock price.

Stock quotes are a powerhouse of critical information, which can help transform a newbie investor into a savvy one! Read, understand, draw insights and take smart investment decisions!

Take a FREE Certification Course on Stock Market

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