Investing your money in the right stocks can reap profitable stock investments. But the question here arises, what are the right stocks to invest in? What parameters must be considered while making the investments? Well! Not to worry, after a very careful analysis of the stock market, we’ve discussed the various parameters which must be considered while investing in shares and stocks.
There are various tools which are used for stock performance analysis. Few of them are:
- Hit rate
- Sluggish Rate
- Holding Period
- Performance relative to the benchmark
These are are some of the best parameters to be considered while planning to invest in stock market India. An elaborate study of these parameters have been discussed below:
1. Hit Rate:
Hit rate can be quoted in layman terms as an evaluation of your performance as an investor. This is not a stock performance analysis parameter, but a parameter to analyse your performance as an investor. The formula for calculating the hit rate is:
Hit Rate= No. Of Profitable investments/ Total No. Of Investments
Many times, investors may fall prey to investing in the wrong stocks with poor growth rates while it is recommended to invest less in numbers but invest where the probability of growth is maximum. Investing is the wrong stocks can result in poor market performance in the long run. Hence, stop and analyse your performance frequently to check if you’re moving in the right direction and making profitable stock investments.
2. Slugging Rate:
The motive of any investor is to earn profits. If your profits are successfully able to outdo the losses incurred by you, then the investment can be regarded as a profitable investment. Slugging rate is a parameter to quantify the same and it’s formula is:
Slugging rate= Average gains registered on profitable investments/ Average losses incurred in losing investments.
Higher is the slugging rate, better is your performance. So, always consider slugging rate as a parameter while investing in the Stock market India.
3. Holding Period:
Most of us are in a habit of making rush decisions whereas while investing in stocks you need to play both safe and smart. Holding period implies holding on to stock rather than selling it away if it’s share price goes down. You must analyse the chances of future probabilities of winning and then only finalize your decision.
4. Performance Relative To The Market Benchmarks:
There are set benchmarks with which you can evaluate the performance of your invested stocks. NSE Nifty 50 or BSE Sensex is the broader market indices which can give you a better idea of the current situation of your stock investments. These indices will guide you on whether to increase your share or to withdraw them considering the risk.
If you’ve a keen interest in stocks, do follow these parameters to play safe. Also, you can refer to IntelliInvest App for your stock performance analysis and risk-free investments.
IntelliInvest 