Taking delivery of shares during quarterly results is very common among investors/traders who knew the historical performance and current market situation of those particular companies or sector, so study historical yearly profits and sales ratios of top companies and buy shares of those companies.
Some weeks before, their quarterly results and after declaring their huge growth in quarterly results, obviously share price will shoot up then you may sell your shares and make handsome profit in very few weeks.
If you hold bit longer, then you may also get benefited of dividend. If companies make outstanding profit then they may declare dividend.
RETURNS ON INVESTMENT
There are very important benefits of Delivery based trading.
Hold as long as you want : If you buy shares and if it goes down, then you can hold them and sell them only when your shares go above your buy price.
Loan : Now-a-days some banks and some financial firms provide loans on your shares. So you can utilize your shares in your bad times.
Dividend (very important) : If companies make good profit, then they may declare dividend per share. If you hold shares of such companies then you may get dividend per share.
Good returns
Now-a-days if you keep your money in banks then you get maximum 9% or 9.5% per year. If you invest in shares of good growing companies then you can earn minimum 15% returns per year. Some companies give 30 to 40% returns per year.
Best share market returns are based on delivery based trading for long term.
Bonus share : If company makes extra ordinary profit then company may declare bonus shares. Bonus share like 1:1 means if you have one share then you may get another free.
So if you have delivery of such shares then you are liable for such bonus shares.
Delivery based trading yields good returns
MONEY MAKING OPPORTUNITIES
It become very important to decide for delivery based trading that how long to hold shares of a company.
Please watch on following two important points:
- Watch quarterly results of a company and check whether company is declaring/posting consistent profit or sales, its very important for a company to declare quarterly results in good profit percentage in order to prove its consistent growth in the market.
- Declaration of future plans, expansions, acquisitions, mergers etc. Any good such plans can boost companies profit, so you may plan to hold such shares. Such plans are very important.
FINANCIAL PLANNING FOR RETURNS
It’s another important point to consider, if you hold more than one share then it is always advisable to prepare technical document for all your shares.
You can prepare excel or word sheet on your computer or you can write in your notebook.
Points to involve/write with date :
- All quarterly results—including profits and sales ratio and other financial ratio.
- Declaration of bonus or dividend.
- Declaration of acquisition, expansions etc
- Weekly volume, close price, PE ratio, any company news etc.
In this manner you will come to knew what is happening about your share and you can decide when to sell or till what
period to hold. This system is called portfolio maintaining.
Even you can keep a close watch on share which you are planning to buy and if you get proper signal or feel comfortable with its quarterly results or news/future plans, then you can jump and buy that share.
