Returns with Low Risk

Delivery based trading means buying shares and holding them for a certain period of time is called delivery based trading . The shares you bought will be in you Demat account . Once you take the delivery of shares you could hold them as long as you want . You must have sufficient funds in your account . To take delivery . You need not get any margin to buy shares in delivery . Study the following points carefully and get the best returns in a short period of time
Basically , Delivery based trading can be minimum one week , one month or a couple of months . How long you hold your scrips and shares will depend on other technical indicators and averages .

How to select best scrips ?
There are thousand of shares and stocks, which one is best for delivery trading and which one will give maximum profit in short period of time . Have a look on the selection criteria points :
1. Sector-50 percent of stocks rise and fall is directly related to the strengths and the weakness of its industry group .
2. Never lose more than 1 – 2 percent of your total mount on any trade .
3. Promoters holding more than 40 percent indicate safety for retail investors .
4. Liquidity – buying and selling of shares minimum one litre per day .

Consistent Earnings : Generating profit consistently year after year or quarter after quarter .

EPS : Earning per share is calculated by taking a company’s net earning and dividing by the numbers of outstanding shares of the stock the company has .

P/E Ratio : EPS is a great way to compare earnings across companies , but it does not tell you anything about how the market values the stock . That is why fundamental analysis use the P/E ratio , to figure out how much the market is willing to pay for a company’s earnings. Higher the PE ratio , more people are convinced to pay high for that share expecting higher growth in the coming future .

Dividend Yield : It is calculated by taking the amount of dividends paid per share over the course of a year and dividing by the stock price . Its percentage return a company pays out to its shareholder in the form of dividends . The higher the percentage the better will be the return .

Price/Book Ratio : The higher the ratio the higher the price the market is willing to pay for the company above its assets . It is more useful to value investor than the growth investor .

Price/Sales Ratio : As with earning a book value , you could find out how the market is valuing a company by comparing the company’s price to its annual sales . Lower Price/Sales are usually thought to be the better investment since their sales are priced cheaply . P/S ratios are usually used for only for unprofitable companies , since such companies don’t have a P/E ratio .

Returns on Equity : It is used as a general indication of the company’s efficiency , in other words , how much profit it is able to generate given the resources provided by the stock holders . Investors usually look for the companies with ROE that are high and growing .

Debt to Equity Ratio : This should not be more than 1 , and less than 1 indicates the company has very less debt . This is very important during market down trend as the company has to pay lots of interest ratio beside low profitability . So its good sign , if company has less debt and that is debt equity ratio.

Investment Tips in Delivery Based Trading :
1. Buy shares of different companies : Don’t ever try to pull all your money in a single share . Try to get shares of the multiple companies and if possible from different sectors . You will always get benefited , by investing in companies of different sectors , because we never know which sector will have good news and which sector will have a bad news . “ Market always reacts for news “

2. Be Patient : When you buy shares , they may go down . In share market its general practice that shares go up and down . If they go down than don’t panic and sell your shares . Most of the investors wait till their shares come to their buying level and then sell , but generally they forget that is the actual buying level of shares and from this level onwards the share price will starting moving upwards .

3. Hold as long as you want : If you buy shares and if it goes down , then you can hold them and sell them only when your shares go above your buy price .

4. Loan : Now – a – days , some banks and some financial firms provide loans on your shares . So you can utilize your shares in your bad times .

5. Dividend : If companies make good profit , then they may declare dividend per share . If you hold shares of such companies then you may get dividend per share .

6. Good Returns : Now – a – days if you keep your money in banks then you get maximum 9 or 9.5 percent per year . If you invest in shares of good growing companies then you can earn minimum 15 percent returns per year . Some companies give 30 to 40 percent returns per year . Best share market returns are based on delivery based trading for long term .

7. Bonus Share : If the company makes extra ordinary profit then company may declare bonus shares . Bonus shares like 1:1 means if you have one share then you may get another free . So if you have delivery of such share then you are liable for such bonus shares .

Financial Planing for your Share returns : It is another important point to consider , if you hold more than one share then it is always advisable to prepare technical document for all your shares . You ca prepare excel or word sheet on your computer or you can write in your notebook .
In this manner you will come to know what is happening about your share and you can decide when to sell or till what period to hold . This system is called portfolio maintaining .
Even you can keep a close watch on share which you are planning to buy and if you get proper signal or feel comfortable with its results , then you can jump and buy that share .