Strategies Affecting Stock

Market
The stock market can be unpredictable, but having a strategy can increase your
chances of success. Here are some important strategies investors need to know.

AK by Aditya Kanchan Baras

Market Analysis
Market Trends
Analysing the stock market
trends to predict performance.
Using market indicators, like
volume and price action helps
investors make decisions.
Bull or Bear?
Identifying market trends helps
to determine whether a stock is
in an upward or downward
trend.
Investors use technical and
fundamental analysis to
determine this.
Patience and
Knowledge
Long-term investors should have
patience and knowledge.
Research the market before
investing. Avoid herd mentality
and emotional trading.
Fundamental Analysis
Market Cap PE Ratio

Market capitalisation is the total value of the This number shows how much investors are willing
company. Divide the market cap by the number of to pay per rupee of earnings. High PE ratio suggests
shares to get the stock’s price per share investors are optimistic about the company’s
growth.

Revenue Trends Debt-to-Equity Ratio

Studying the company’s revenue over the past 3-5 This ratio shows the amount of debt a company
years. This helps to identify their profitability trends owes and its shareholder investments. A lower ratio
and potential future growth opportunities. is better, indicating a company can comfortably
handle its debt.
Technical Analysis
1 2
Trend Identification Patterns and
Utilising charts and graphs
Indicators
to identify trends of a
company’s stock price Identifying specific
performance – upwards, candlestick patterns, trading
downwards, or sideways. volume, and moving
averages, as well as other
technical indicators to
determine stock
performance.
3
Timing of
Trades
Analysing technical signals
to decide the right time to
enter and exit a trade,
thereby maximising return
on investment.
Event-Driven Analysis

Product Launch Company Conferences Industry News

Analysing a company's new Attending corporate conferences Keeping up-to-date on industry

product launch and the impact it to learn about any new news, as it could adversely or
will have on their share prices developments, regulatory positively impact a company’s
before investing. changes, or future plans. share prices.
Quantitative Analysis
EPS (Earnings Per Share) ROE (Return on Equity)

EPS is calculated by subtracting the company’s ROE is calculated by dividing net income by
expenses from its revenue and dividing by the total shareholder equity. It helps investors evaluate the
number of outstanding shares in the market. company’s efficiency.

PEG (Price to Earnings Growth Ratio) Beta

PEG is calculated by dividing the stock's price-to- Beta measures the volatility of a company’s stock in
earnings ratio by the expected growth rate of the relation to the overall market. A beta of 1 implies
company. It's an easy valuation metric to help the stock is moving along with the market; higher
compare companies with different growth rates. values indicate a more volatile stock.
Investment Strategy

1 Value Investing

Investing in stocks that are undervalued compared to the market, where the intrinsic value is greater
than the current price.

2 Growth Investing

Investing in companies that have the potential to grow and expand, with a high growth rate and
strong profit margins.

3 Income Investing

Investing in companies with a history of strong dividends and stable returns. Typically less risky but
provides lower returns compared to growth investing.
Risk Management
Diversified Portfolio
A diversified portfolio spreads the
risk across different stocks,
sectors, and asset classes. This
helps to reduce the impact of
stock price fluctuations.
Stop-Loss Orders
A stop-loss order is a tool
investors use to protect
themselves from downside risk. It
helps to minimise losses by
triggering an automatic sell at a
certain price.
Professional Help
A professional portfolio
manager can help with the
complexities of risk
management.