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Try To Understand Business Of A Company Before Buying Its Stock.



 People enter the world of stock market in the expectation of making big money. Many investors invest in stocks as per advice by someone and they do not try to know anything about the business of companies. This may results in losing the hard-earned money.

Suppose, you  invest in a stock. The meaning of this sentence is like that....

  • Actually, you do not invest in market.  
  • You invest in stock of a company which is doing some business.
  • Now, you own a part of the business as a share-holder.
  • As you are having ownership of the business, you are entitled to a share in the profit from the business.
  • You are compelled to bear losses if the business makes losses.
  • There is no guarantee of profit in investing in share market.
  • Investment may reduce by losses.
  • Investment in stock is risky.

So, understanding the business of a company is very much important before investing in the company.

We have already discussed about stocks which are classified according to their Market Capitalisation.
  • Large Cap Stocks
  • Mid Cap Stocks
  • Small Cap stocks
Now, we will discuss about different sector of business of different companies with example of Indian Companies.

  • Financial Sector: State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Indusind Bank, Bajaj Finance, Yes Bank, HDFC
  • FMCG : ITC, Dabur, Hindustan Unilever, Britinnia Inds, Nestle India
  • Energy: Reliance Industries, IOC, BPCL, NTPC, Power Grid Corp
  • Technology: Infosys, TCS, Wipro, HCL Technologies
  • Automobile: Marutu Suzuki India, Tata Motors, Mahindra & Mahindra, Bosch, Eicher Motors, Motherson Sumi, Hero Motocorp
  • Diversified: Grasim Industries, L & T
  • Metals: Hindalco, NMDC, Tata Steel
  • Healthcare : Lupin, Dr. Reddy's Lab, Sunpharma
  • Communication: Bharti Airtel
  • Construction: Ultratech Cement, ACC Ltd, Ambuja Cement
  • Chemicals: UPL
  • Engineering: Bharat Electronics
etc, etc & etc.....


(Please note that the name of the companies given above are just for showing examples for your understanding and these are not my suggestions for investment.)



Happy Investing !!!
দীপ
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