By Irshad Mushtaq
Intraday trading in the stock market involves buying and selling shares within the same trading day on an exchange like the Nse and BSE in India.
It means buying and selling positions on the same day, based on fluctuations in share prices without using any tools and relying solely on emotions. However, trading in this way can be risky and many end up losing a lot of money, as they lack financial wisdom and are driven by emotions.
On the other hand, investing in the stock market involves holding shares based on company fundamentals such as earnings per share, price earnings ratio, balance sheet quality, management quality, and future growth prospects. Investors focus on the long-term vision of the company’s growth rather than short-term fluctuations in share prices. As profitability and management quality improve, the stock price tends to increase, resulting in a return on investment.
Therefore, one should be patient while investing and must be well-versed with fundamentals. One should understand the company’s earnings per share, price-earnings balance sheet, profit and loss accounts, management policies, industries, and benefits from the government policies like PLI schemes, or any other direct benefit which shows the sector looks good for the future .
All these things should be covered so buying a share means you become the co-owner of that company,the shareholder of that company if the company is doing well for a long period. Surely, the share will follow the same as the price of the share will increase. But the question is one should have good patience to hold the share and believe in the company’s business.
Listed shares listed in Stock exchanges in India, like the National Stock Exchange and the Bombay Stock Exchange,Fluctuations occur due to many reasons, such as trading on screens revolving around short-term share fluctuation, events, or the market’s nature of fluctuation. However, these factors have minimal impact over a long period. For example, if you purchase a high-quality share and the market suddenly declines the next day, causing the stock to decrease, it is likely due to technical issues or negative events and nature of market , Nevertheless, if the company’s long-term story and performance remain strong, these short-term fluctuations become insignificant.It is essential to focus on the overall long-term growth of the company, and the share value will eventually reflect this.
In conclusion, it is a better idea to invest in diversified and quality shares. It is always better to have a diverse portfolio.
You become a shareholder of a company when you buy its shares. So, it is wise to view your investment as a partnership, holding on to quality shares for best returns.
- Learn from the insights of writer and investor, founder of MI Securities and Business Partner at Sharekhan! Reach out to him at [email protected] for valuable knowledge on financial matters
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