RSPH Blogs - Finances!

  What Are Penny Stocks? Penny StocksCompaniesing but the Stocks that are cheaper in comparison to others.... In India, generally stocks which are less than 100 rs. are considered as Penny Stocks. & in The U.S. .... the Stocks less than around 7$ are considered as Penny Stocks! In simple words, as the name itself might suggest.... Penny means Coins.... So we know that coins aren't really used for large amounts to be paid.... I mean we can use them but we just don't.... Infact, we'll rather use cash to make large payments for the fast & smooth functioning of the system! So, Penny Stocks are basically "Cheap" Stocks! Like the one's that just aren't very pricey & sometimes even low than the average Stock Prices! [I'll talk 'bout Investing in Penny Stocks within a while!] By Penny Stocks.... I more specifically mean that Penny Stocks are those Stocks.... that prices generally range from such to such in what we may just pay as in Coi

  Today we are gonna understand what exactly Short Selling is.... I know.... its like Rocket Science for the most of us.... but honestly, I'll make sure that you understand "the basic concept of short selling and how it works", by the end of this article.... trust me i too struggled to understand it in the beginning but I how so ever managed & I bet by the end of this article so will you! Ok so lets just start from what exactly is Short Selling in simple words & than move on to how things work.... So first.... What Is Short Selling? In Simple Words! Short Selling is nothing but selling high & than buying low! The basic investing principle states that you should buy low & sell high.... We did exactly the same here but we just sold first & bought later....! Lets talk about how it works to make things more transparent! HOW DO SHORT SELLING WORKS? Now, I want you to understand that we invest with the help of brokers, you know those trading app

  As we know Share Market keeps on fluctuating over time as we know that it gets affected by certain Economic Factors & as well as the Investors behaviour & actions! Today; we are talking 'bout a usual Economic Factor & it's impact on Share Market! & the Economic Factor is as we've known from the title : Inflation.... So, lets just start talking abing it.... How A Rise In The Rate Of Inflation Affects Or Impacts Share Market? But let us first understand.... What Is Inflation? Basic Definition! Inflation refers to an increase in the cost of living.... such as goods & services as the value of every penny decreases! Also Read: What Is Infaltion? Now first of, the direct impact Inflation have is on 2 major things the Share Market is kind of made up of.... Companies & Investors! First off lets talk 'bout Companies.... Now not all Companies are bad performing one's but many Companies do struggle.... Lets talk 'bout the s

  What Is Dividend Yield? Dividend Yield is nothing but the percentage of the Share the Company is gonna pay in Dividends! How Is The The Dividend Yield/Percentage Calculated? It is calculated by dividing the annual dividend payed per share (last year) by the current share price & than multiply it by 100 to obtain the dividend %. Formula:- Lets take an example & try taking out the Dividend Yield by simple calculation. So lets say that the annual dividend payed per share was 10$ last year. & the share price currently is 100$. So now we have two things we needed.... Lets do the calculation, than.... 10/100×100 = 10% Dividend yield = 10% Its just that simple.... now there may or may not be Companies with a 10% Dividend Yield OR you know like Companies in reality won't have these simple numbers for calculations.... I used simple numbers to make it easy to understand! Anyways; so that is basically it for today.... I hope you understood what I was expla

  Today we are gonna cover the following topics in this Article.... What Is Stock Split? Explained With An Example! Why Do Companies Split Up Their Share Prices? Explained With The Same Example! What Are Bonus Shares? Explained With The Same Example! What Is Stock Split? Exaplained With An Example! Stock Split is nothing but splitting of the stock/share price. Spilliting up the stock price does not affect the Company's Market Capitalization Or any other factor of the Comapny except for the Company's Share Price Or The Number Of Outstanding Shares In Example For example-- lets say theres a Company names ABC & is worth $100,000 & have 10,000 shares each of 10$ currnetly issued in the Market. Now lets say that after 6 months the Company's Share Price is of 20$.... hence the Company's worth 200,000$ now.... But we know that the Company still have only 10,000 shares in the Market.... But the Company's director OR CEO says that they wanna split up the s

  We've all heard of a Bubble in Share Market.... right?  like, recently there was a tech Bubble Burst in the year 2000-2001.... & also, there are bubbles in Real Estate, as well.... you know it was the Housing Bubble bursts that lead to the worst Financial Crisis (of 2008) since the Great Depression....! So Yeah! We've all herad of the term "Bubble".... But have you ever wondered what is this "Bubble" all about in Share Market, Real Estate & all? Pretty sure that you did wondered.... 'cuz that may be the reason that you are here.... right now.... Ok! So today we are gonna talk 'bout what exactly a Bubble is.... & its 4 stages explaining-- how is it formed.... how does it bursts & what happens after it bursts.... So here we start with.... What Is A Bubble? A bubble in general is a condition in which the prices of certain assets are skyrocketed by the investors because of their overly optimistic expectations & irrationa

  What Is Market Capitalization? Market Capitalization is basically the Total Value Of A Company. To do the valuation.... we multiply the total number of outstanding shares with the current share price.... For instance— if one share of a company is of 10$ & there are currently in total 100,000 shares in the market.... [No. of outstanding shares = 100,000 Current Share Price = $10] then the Market Cap. (100,000*10) would be of 1 Million $.... which means the Company is worth 1 Million Dollars!  & if the price of the share increases by just 1$ making the share price of 11$ then the Market Cap. increases by 100,000$ (11$*100,000 = 1,100,000$ [gain $1 per share; hence, 100,000$ gain in total]) Note—— it's just an example.... the calculations made are of small numbers, to make it look simple and easy for everyone to.... in reality many Companies Market Capitalization is of around Billion--Trillion Dollars in total! Why Is Market Cap. So Important? Well, it is so because the Mark

  We've all heard statements like— "The Market is on a Bull Run, today!" "The Stock Market is Bearish, today! So many of you might know that, terms like— Bear 🐻 & Bull 🐂 are just basically talking 'bout/refferring towards the Share Market's behaviour which is in REALITY.... juat the Investors behaviour.... 'cuz you know Share Market is not something that have the ability to behave/react ON ITS OWN! & so, many of you might understand that Bear means down (indicating that the Share Market is DOWN today) & is often reffered to as Bearish.... Whereas, Bull means up (indicating that the Share Market is UP today) & hence known as Bullish! But have you ever wanted to know why is that so? Why, when the shares are performing well then the Stock Market is known as Bullish & when the prices fall then it is known as Bearish? Today, I'm gonna explain this.... Ok! Well, so starting with, "Why is the Market considered Bullish when the Shar

  What Are Dividends? A Company shares a little amount of their profit with their share holders known as Dividends. Do All Companies Pays Dividends? No! It is not important for a Company to pay Dividends. & Infact, if a Company is NOW paying Dividends then nobody can say for sure whether if that company will keep on paying Dividends forever. Henceforth, it is not compulsory for a company to pay dividends to their investors. What Kind Of Companies Pays Dividends? Generally, Large Companies pays Dividends. The Small Companies/Businesses rarely pays any Dividends, as they usually focus on Business Expansion & try to reinvest in their own Business from the profit they've made. & that is totally understandable! By the way, Now it's not like the Large Companies don't grow/try to expand.... I mean they do, but you know, like— they are already LARGE. They've grown almost! You know.... If that makes sense to you! Who Pays Dividends? Paying Dividends OR Not Paying Div

  Almost all of us have came across such people who consider investing in Share Market as Gambling. So today, let us get into the roots of that & figure out the Truth! So let's start with talking 'bout Share Market in depth, Ok! So now let's see; So the first thing is that, Do we have any knowledge regarding something in Share Market or are we just blindly into investing in the stocks, just in the hope of earning a profit? {We'll come to that within a while!} Let's first understand a bit about the mechanism of the Share Market!

  Here in this article, we'll learn if we require a Stock Broker to start investing in Share Market! So actually, I'm not refferring towards a DP (Depository Participant), here. As they are anything between banks to brokers. As of now in this article, I refer it towards as human beings who help/advice people to pick up Stocks/Shares & charge them for that. So in this article I'll talk about why should you have one (broker) & why you shouldn't! It's basically 'bout the pros & cons! So, First Question.... Do you need a Stock Broker to start Investing in Share Market? & the answer is "Not really"! ———— But it's upto you! You know, if you have the time to do analysis and don't want to depend on somebody then go ahead you are free! Which means you don't have to get one (Stock Broker)! But if you don't have enough time to do the analysis of Company(s) to pick good Stocks/Shares. & if you are desperately willing to invest i

  A Crash; a Recession & a Crisis.... are some terms many of you might have came across many times but never were told the true meaning of.... Or maybe you found it really complicated! Well, today I'll try defining a Crash, a Crisis & a Recession in simple words & also I'll let you know how does the Economy looks like if there's a Crash; a Crisis; or a Recession, going on! We'll know about the differences & all....! So here we go, Well, let's first understand how does an economy simply works! Now there's no complexity in this.... Just take a look around you & you'll find almost everybody engaged in certain tasks which are closely tied & therefore affects a specific place's economy! Like— You see! There are people all around us who do jobs in different companies. Now no matter if that company is of our own country or if it's an international company.... they provide job opportunities to people & pays them for the work they

  Everyone in Share Market comes with a motive of earning profit. Right? Actually, nobody at all is doing something for free. It always costs something. MONEY or TIME! Stock Exchanges & Depository Participant's play a very important role in the entire Share Market! Have you ever wondered how do they themselves make money? Let's find out: How Do DP's (Depository Participant's) Make Money? To those who don't know what is a Depository Participant than I'll like to tell you that DP's basically is something with which we can open our trading account. It can be a trading app or something like that which basically helps you to trade! So DP's have brokerage charges which they themselves are charged. & You know whenever you'll invest either in Intraday OR/& Delivery they have different charges set. This is an income source for them. Different DP's have different prices for each. So whenever we pay a commision our main motive is to earn more th

  Warren E. Buffett is best known b'coz of his wise investments he make & high returns he earns from them! Today, Warren Buffett is one of the most richest person's with the net worth of Billions Dollars as of now in 2021. & He is known as the most successful investors of all time. He started investing at the age of 11. & filed his taxes for the first time when he was 13. As, Warren Buffett once said; "I made my first investment at the age of Eleven. I was wasting my life up until then." This "saying" of Mr. Warren Buffett dictates the importance of Investing. "The most important investment you can make is in yourself." "The more you learn the more you earn!" Whereas these 2 quotes dictates to keep improving! There are many Investing Lessons & Rules, Warren Buffett have often spoken about. Today we are going to go through many such quotes, lessons, rules & sayings of/by Mr. Warren Buffett. I've picked some of my fa

  Well you cannot do Value Investing without calculating the Intrinsic Value of a share. So today let's figure out how do you calculate the Intrinsic Value of a share. Calculating the Intrinsic Value of a share is a vital part of doing Value Investing! Well, is any of you sick of that formula which many you might have came across multiple times but are always unable to understand what purpose do certain field's have/what purpose do they carry & all & all. I won't say that this blog does not have that formula OR I have another way to find the Intrinsic Value. Well the formula & the way is the same, here! But don't be disappointed! I'll let you know how to fill certain field's & take out the intrinsic value of a share! Well, I really have came across the same where I was completely clueless of what does this formula means & it really seemed very much difficult & complex to me at first but I finally, somehow managed to understand that &

What Is Value Investing? Value Investing is an investment strategy which have continously paid high returns to investors. It was introduced by Benjamin Graham in the 1920's. You know, usually, when their is a sale in a mall. We rush to buy some stuff because in that case we get discount on that stuff. Right? Similarly, Value Investing also encourage us to buy such stocks (which are on discount). These stocks which we get on discount are known as undervalued stocks. Some Points We Are Supposed To Understand Before We Start Doing Value Investing! PRICE & VALUE are both different. Price is what we give & Value is what we get. Every company has it's own value known as intrinsic value. The intrinsic value depends on company's FINANCIAL STRENGTH & FUTURE GROWTH. However, the stock price of a company depends on the market itself. The stock/share price of that company can be less (<), more (>), or equal (=) to the company's intrinsic value. In value investing

Derivatives & Its Types! A Derivative is a Contract which is usually made to limit or to decrease or to avoid the risk which can be faced by one due to the market fluctuations ! Definition Of A Derivative! A Derivative is a financial instrument that derives its value from an underlying asset. I Know You Might Have Not Gotten The Point, YET! Well, you just don't worry if you didn't get it! It'll make more sense within a second! EXAMPLE- So, let's suppose that there is one "Treasure Box" Which Is Empty! So now, what's the value of the key of that "Treasure Box"? Probably Nothing! Right? & NOW If I say that around A Million Dollars In Cash is Available in that same Treasure Box! Then, NOW what is the value of the same key? We can confidently say A Million Dollars! Isn't it? So, HERE, The KEY is a Financial Instrument, which have derived its value from the underlying asset & we can say that the underlying asset is the money present

  Apart from Futures & Forex Trading & Stocks Trading & Commodities Investments, there is one more thing which is as accurate when it comes to trading, & that is Options. It usually would have been noticed in an often repeated phrase/term F&O. Options have now became one of the most traded Derivatives of all times in the world! Lets first understand what a derivative basically is.... Definition Of A Derivative! A Derivative is a financial instrument which derives its value from an underlying asset! It might seem complex at first. So let me explain with an example; So, let's suppose that there is one "Treasure Box" Which Is Empty! So now, what's the value of the key of that "Treasure Box"? Probably Nothing! Right? & NOW If I say that around A Million Dollars In Cash is Available in that same Treasure Box! Then, NOW what is the value of the same key? We can confidently say A Million Dollars! Isn't it? So, HERE, The KEY is a Financia

  There are a bunch of more things we can trade in today rather than just companies stocks. Like - F&O (Futures & Options), Currencies & Commodities Investments, Bonds, etc. etc. Well today, I'll like to make y'all familiar with Commodities Investments.... In this blog, we are going to cover a bunch of different things about Commodities, one must know to start investing.... Here, is the "Table Of Contents".... The below mentioned topics are the one's which are to be covered within this blog, today & from here you can even skip to a specific part of this blog, you'll like to! Table Of Contents! What Are Commodities? Definition! Types Of Commodities Available To Us, Which Can Be Traded? Commodity Exchange's! How Are Commodities Traded? & In What Form Are Commodities Traded, In Reality? How Do 'WE' Invest? Risk! Why To Invest Inspite Of Being Fa

  There are so many more things in Stock Market we can trade apart from just company's shares. Like-  F&O (Futures & Options), Commodities & Currencies! Today we are mainly focusing on the basics of Futures! ( Futures)! {Basics} A Future is basically a Derivative! I know it's just the start & here's a whole new term "Derivative". It might not make enough sense, now; but you are just supposed to understand what a derivative basically is; in order to understand Futures! Definition Of A Derivative! A Derivative is a financial instrument which derives its value from an underlying asset! It might seem complex at first. So let me explain with an example; So, let's suppose that there is one "Treasure Box" Which Is Empty! So now, what's the value of the key of that "Treasure Box"? Probably Nothing! Right? & NOW If I say that around A Million Dollars In Cash is Availabl