Five things that you need to analyze before you make a purchase in share market.

Stocks are affected by various factors in an economy. If a person is thinking about becoming a part time trader then it is strongly advised to rethink that decision. However, there are a list of things that any armature can prioritize before trading.

1. Trend of the stock price.
Stock price trend provides the information about the steadiness of price of the stock we are focusing to purchase. If there is too many multiple stocks you are currently focusing then, serious focus towards their price change is necessary. Realizing trend will provide substantial information about possible price of the stock in near future. If you have analytic skills then you will be able to see the pattern in the graph of the price of the stock. There is so certainty in the prediction made about the price after trend analysis but there's certain amount of probability in it.

Every traders can get the benefits from the graph of the price vs time of any stock they are targeting to purchase. This is to make sure that a trader is aware about possible price of the stock in certain time in future.


2. Earning per share analysis.
EPS provide the information about the earning made by the organization on per share basis. EPS tells us how much return is provide by the organization on a single share. This information is different from the overall profit any organization is making. It is about how much a single share is earning in an accounting period. High EPS provides more dividend for share holder, but more net profit does not ensures such certainty. If share holders are not getting enough rate of return or dividend then they are not going to pay more amount of money for that share in the market.

3. Payback period.
Any establishment, organization or institution is attractive enough only when it can provide back all the investment made by the investor in short time period. The investor is always concerned about the prevailing interest rate, rate of return, cost of capital and time value of money. In order to choose the company which will be providing dividend in short time period we must examine the EPS, dividend policy and prevailing payback period of the organization. If it's short then it's not so risky to invest.

4.Company's image
Company's image serve as assets for the organization. It is representation of the company in the consumer's mind. If it's strong, then consumer will never raise question on it's performance. If it's weak, then no-matter how much a company is making profit, people will never accept that it's a good company that they can rely upon. It's just like people are always ready to purchase the stocks of Cocacola company. They completely trust that it's going to make profit always.

5.purchasing Price.
We all believe that we make profit while selling, but we don't. The real profit is made at the moment we make purchase. If the purchasing price is less, then we will make more profit even though we have sell the product at low price. At certain point we have to sell it anyway. So, the less we pay for the stock, the more we make profit after selling it.


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