what about share market ?

Answer 1

highly inflammable keeps hand away !

Answer 2

I agree completely with the answer given by the first responder. I will add one thing to that response. Timing is important. Those who dumped money into stocks in 2000 will certainly vouch for that. There is a time to add money to the market and a time to withdraw money from the market. There is more truth to the old saying "Buy low, sell high" than most will give credit to.

You will hear repeated thousands of times that if you had bought Microsoft when it was first issued and just held it, you would be a millionaire today. That is true. But what they do not tell you is that for every one Microsoft there are 1000 other companies that went bankrupt. So what do you think your odds are of finding the one Microsoft? More probably you would find Enron, Global Crossing, or World Com. All of those were at one time thought very highly of by professional investors and toted as being the next Microsoft.

Answer 3

If you are investing in the share market do your research on any company you want to invest in. Diversify so that you do not concentrate solely on one area. Read up on investment and understand that investing in shares is a long term proposition.

Answer 4

ya good.....making money

Answer 5

The stock market, individual investors, and financial risk
Riskier long-term saving requires that an individual possess the ability to manage the associated increased risks. Stock prices fluctuate widely, in marked contrast to the stability of (government insured) bank deposits or bonds. This is something that could affect not only the individual investor or household, but also the economy on a large scale. The following deals with some of the risks of the financial sector in general and the stock market in particular. This is certainly more important now that so many newcomers have entered the stock market, or have acquired other 'risky' investments (such as 'investment' property, i.e., real estate and collectables).

With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtalking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.

This is a quote from the preface to a published biography about the well-known and long term value oriented stock investor Warren Buffett.[1] Buffett began his career with only 100 U.S. dollars and has over the years built himself a multibillion-dollar fortune. The quote illustrates something of what has been going on in the stock market during the end of the 20th century and the beginning of the 21st.

The behavior of the stock market

NASDAQ in Times Square, New York City.From experience we know that investors may temporarily pull financial prices away from their long term trend level. Over-reactions may occur— so that excessive optimism (euphoria) may drive prices unduly high or excessive pessimism may drive prices unduly low. New theoretical and empirical arguments have been put forward against the notion that financial markets are efficient.

According to the efficient market hypothesis (EMH), only changes in fundamental factors, such as profits or dividends, ought to affect share prices. (But this largely theoretic academic viewpoint also predicts that little or no trading should take place— contrary to fact— since prices are already at or near equilibrium, having priced in all public knowledge.) But the efficient-market hypothesis is sorely tested by such events as the stock market crash in 1987, when the Dow Jones index plummeted 22.6 per cent— the largest-ever one-day fall in the United States. (However, this was part of a world-wide crash of stock markets which did not originate in the US.) This event demonstrated that share prices can fall dramatically even though, to this day, it is impossible to fix a definite cause: a thorough search failed to detect any specific or unexpected development that might account for the crash. It also seems to be the case more generally that many price movements are not occasioned by new information; a study of the fifty largest one-day share price movements in the United States in the post-war period confirms this.[2] Moreover, while the EMH predicts that all price movement (in the absence of change in fundamental information) is random (i.e., non-trending), many studies have shown a marked tendency for the stock market to trend over time periods of weeks or longer.

Various explanations for large price movements have been promulgated. For instance, some research has shown that changes in estimated risk, and the use of certain strategies, such as stop-loss limits and VaR limits, theoretically could cause financial markets to overreact.

Other research has shown that psychological factors may result in exaggerated stock price movements. Psychological research has demonstrated that people are predisposed to 'seeing' patterns, and often will perceive a pattern in what is, in fact, just noise. (Something like seeing familiar shapes in clouds or ink blots.) In the present context this means that a succession of good news items about a company may lead investors to overreact positively (unjustifiably driving the price up). A period of good returns also boosts the investor's self-confidence, reducing his (psychological) risk threshold.[3]

Another phenomenon— also from psychology— that works against an objective assessment is group thinking. As social animals, it is not easy to stick to an opinion that differs markedly from that of a majority of the group. An example with which you may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer to have their opinion validated by those of others in the group.

In one paper the authors draw an analogy with gambling.[4] In normal times the market behaves like a game of roulette; the probabilities are known and largely independent of the investment decisions of the different players. In times of market stress, however, the game becomes more like poker (herding behavior takes over). The players now must give heavy weight to the psychology of other investors and how they are likely to react psychologically.

We are also liable to succumb to biased thinking. An example is when supporters of a national football team (or a favorite stock), for instance, are overconfident about the chances of winning (or the stock moving up).

The stock market, as any other business, is quite unforgiving of amateurs. Inexperienced investors rarely get the assistance and support they need. In the period running up to the recent Nasdaq crash, less than 1 per cent of the analyst's recommendations had been to sell (and even during the 2000 - 2002 crash, the average did not rise above 5%). The media amplified the general euphoria, with reports of rapidly rising share prices and the notion that large sums of money could be quickly earned in the so-called new economy stock market. (And later amplified the gloom which descended during the 2000 - 2002 crash, so that by summer of 2002, predictions of a DOW average below 5000 were quite common.)

Irrational behavior
Because a considerable part of the stock market is comprised of non-professional investors, sometimes the market tends to react irrationally to economic news, even if that news has no real effect on the technical value of securities itself. Therefore, the stock market can be swayed tremendously in either direction by press releases, rumors and mass panic.

Furthermore, the stock market is comprised of a large amount of speculative analysts, or pencil pushers, whom have no substantial money or financial interest in the market, but make market predictions and suggestions regardless. Over the short-term, stocks and other securities can be battered or buoyed by any number of fast market-changing events, turning the stock market in a generally dangerous and difficult to predict environment for those people whose lack of financial investment skills and time does not permit reading the technical signs of the market.

Conclusion
There have been innumerable recommendations about how to make the stock market easier and safer for the casual, non-professional investor. Few, if any, are likely to prove useful or effective. However, in order to minimize the risks of financial market imbalances, it is important that there be a well thought-out legislative, regulatory, and supervisory infrastructure that functions properly, smoothly, and honestly. This is a never-ending task that requires the participation of all concerned.

Today, average individuals face sometimes very difficult risk management decisions that were not required of previous generations. Both opportunities and risks for the individual investor have been amplified many times over. Yet the average investor still lacks the relevant knowledge. Everyone cannot be a specialist in risk management and financial theory.


Investment strategies
Main article: Stock valuation
One of the many things people always want to know about the stock market is, "How do I make money investing?" There are many different approaches; two basic methods are classified as either fundamental analysis or technical analysis. Fundamental analysis refers to analyzing companies by their financial statements. One example of a fundamental strategy is the CANSLIM method, founded by William J. O'Neil, which aims at finding companies with superior earnings growth and heavy buying demand from market participants, although there are some people who would classify its philosophy a combination of fundamental and technical analysis. Technical analysis studies price actions in markets through the use of charts and quantitative techniques to attempt to forecast price trends regardless of the company's financial prospects.

Additionally, many choose to invest via the index method. In this method, one holds a weighted or unweighted portfolio consisting of the entire stock market or some segment of the stock market (such as the S&P 500 or Wilshire 5000). The principal aim of this strategy is to maximize diversification, minimize taxes from too frequent trading, and ride the general trend of the stock market (which, in the U.S., has averaged nearly 10%/year, compounded annually, since World War II).

Finally, one may trade based on inside information, which is known as insider trading. However, this is illegal in most jurisdictions (i.e., in most developed world stock markets, more or less