Which stock should you buy?

Which stock should you buy?

In the equity market, stock tips are aplenty. Everyone believes themselves to be an expert just because they have a Trading and Demat account and have made some investment in the equity market! Therefore it is very important to have some basic knowledge about share market before you start investing in stocks according to share tips.
There are more than 6000 shares listed in India. But, broadly they can be categorized into four types:
Growth stocks: They are companies which grow faster than its industry or the market. Growth shares do not believe in paying dividends but reinvest profits for expansion and growth. They are marked by high P/E ratio and are always in demand due to potential price appreciation.
Value stocks: They are companies which have good fundamentals but are underpriced as they are temporarily out of favour. Value shares are great picks as they have a greater potential of growth. They have a low P/E ratio and low PBV ratio.
Income stocks: They are companies which regularly pay high dividends. These shares are often less volatile and may limited growth options. Profit from these stocks is in the form of regular dividends declared by the company. They are marked with higher dividend paying ratio.
Penny stocks: They are stocks with low price and low market capitalization. These shares are easy to manipulate because of low volumes. Investing in penny shares is extremely risky as these are extremely speculative in nature, illiquid and marked with volatile movements.

How to invest in Gold?

Gold is a popular avenue of investment and is generally bought as hedge against inflation and economic crisis. It has a cult following in India where it is considered to be a symbol of Goddess Lakshmi and an epitome of wealth and prosperity. Although gold prices have gone through the roof in recent years, Indians continue to be major buyers of gold across the world.
You can invest in gold in many ways. It can be bought in the form of jewellery, coins or bars or through ETFs. The purpose of your purchase determines the form of holding.
Jewellery: Jewellery is the traditional and most popular way to own gold in India. However, in commodity it is a comparatively expensive way to invest in gold due to incidental charges or costs associated with it. Jewellery has making charges which adds around 5% of the cost. Also, you need buy a locker or pay rent for bank locker to keep gold in physical form. This further adds to the cost of buying jewellery. It is better to jewellery if you intend to wear it. But if you intend to use it for investment, it defeats the purpose due to high costs associated with it. Also ensure that you buy KDM or hallmark gold jewellery to ensure purity.
Gold coins & bars: Coins and bars are also a popular way to invest in gold. You can buy them from any jeweller, banks or even from post office. Although, it is a convenient way, it is not a prudent one. Coins and bars come at a premium from the gold rate prevailing in the market which is more than 10%. Also, in many cases, it is difficult to sell them and is generally sold at a discount.
Gold ETF: Gold ETF is emerging as the most convenient and cost-effective way to invest in bullion. It tracks the price of gold and is traded on stock exchange. Here 1 unit of ETF is equivalent to 1 gram of gold. Also, you do not have to worry about storage and purity issues.
To know the current gold rate and gold prices in India, visit www.angelcommodities.com