Wednesday, 16 July 2014

What is Fiscal Deficit and how does it affect the stock market

As a smart investor, one should always make an effort to understand the financial conditions of the country, as they play a major role in how the market will turn out during a day. As any experienced stock investor or day trader will tell you, the market is driven by news, both national as well as international, and hence any nationwide policy change is bound to have a major impact on the market. When the government announces that the country is facing a budget deficit, markets tend to become bearish. Similar trends can be observed when a fiscal deficit is announced. There is, however, a major difference between budget deficit and fiscal deficit, and you need to understand how one is different from the other, as well as each of them affect the market in a different manner.

Explaining the fiscal deficit
 
In the simplest of terms, when the spending of a country exceeds its income, the country is to fall into a fiscal deficit. This is different from a budget deficit because when calculating the fiscal deficit, one does not take into account the money a nation has borrowed from international entities, as opposed to a budget deficit where the borrowed money is also taken into account.

Is fiscal deficit bad for the stock market?
 
A fiscal deficit is not necessarily a bad thing, and can be remedied by increasing the taxes that a country levies on its corporations and citizens. In fact, eminent economists like John Maynard Keynes are of the belief that a fiscal deficit often serves as a stimulus for overall national growth. The country is trying to increase its earnings in order to meet its spending's, which is a great impetus for national growth. A fiscal deficit is often observed in the times when the government launches ambitious projects which yield benefits in the long term. Extensive investment in industries and infrastructure are bound to create a fiscal deficit in the short term, but the corporations that enter the market as a result of these investments not only make up for the investment, but also create thousands of new jobs, thus increasing the overall national income. Therefore, it is not possible to predict the effect of fiscal deficit on the stock market based on just the deficit alone. A strong government with a solid development plan, such as the one that India has in the centre now, can use the fiscal deficit to create long term growth, and the rise in the stock market in the months following the election results is proof of that.

All the stock tips that you will get concerning fiscal deficit will always tell you that the long term movement of the market is hard to predict based on the deficit alone. Services that issue Free share tips also take into consideration factors like policy changes and development plans in order to bring to you the most accurate stock market tips. As always, take these share market tips with a grain of salt, and ensure that you do your own research before following their advice.

Thursday, 10 July 2014

What is the difference between online trading and offline trading

A few years ago, traders had to approach the brokers to get involved in the stock trading. They had to search for a quality broker who could assist them in closing their deals in the market. There was hardly any choice, and everybody had to work through brokers. Those who were unable to find a broker, or didn’t want to work with these professionals had no choice. All this has changed in the present day, it has become very simple for any individual to open an online trading account and start trading in stocks without even contacting to any broker, but it is important to have the knowledge about what is going on in the market.

During offline trading you will have to contact with the broker in order to make a trade with Accurate Intraday Tips. This type of services is liked by people who have little idea about the stocks. Offline trading will benefit you as it provides you with an opportunity to seek expert advice from the broker, who has immense knowledge about the market. On the other hand online trading means you have to trade in stocks by yourself without any assistance of a broker. During online trading you don’t have to wait for the broker to advise you or to help you.

Trading in stocks demands real time information, it includes updates in the share market on the basis of which trading is done and when you trade through a broker, it is obvious you will have much access to the real time information because it appears on the internet. On the contrary online trading provides you full access to the real time information and you can react immediately if there is a change in the stock market, you just need to be active on the internet and keep an eye on the news updates regarding the stock market.

Online trading provides you with an opportunity to save your money. The offline brokers charge more money than the services provided by them, when you are trading online you cut off the broker’s fees and you will not be charged for the calls you make. One of the major advantages of online trading is that you need less capital investment than you will need to start trading offline. Some of the major advantages that you will have while trading online are:
  •  In online trading there is no chance of any kind of fraud as in it you have the complete control over your transactions. 
  • Online trading provides you real time information which leads to react quickly to the situation. 
  • It saves your money as you don’t have to pay to the brokers.
  • It is convenient to trade online from anywhere, it just requires an internet connection. 
  • There are however some precautions you need to follow when using Online trading: 
  • There is a greater risk if you don’t have proper knowledge about how to deal with stocks. 
  • Online brokers charge more money than the offline brokers. 
  • If there is a slow net connection or system failure, there is a risk of big losses.

Saturday, 5 July 2014

For Intraday trading, traders should open account with Trading Company or With Direct NSE Broker ?

Once you have made up your mind about becoming an Intraday trader, the first thing you will need to do is get a trading account from where you can perform your own trades. There are generally two options that you are presented with when you open a trading account; you can either sign up with a trading company, or alternatively, you can open an account directly with an NSE broker. There are different advantages and disadvantages of picking either of these options, and a lot will depend on how familiar you are with the Indian stock market with Free Stock Tips, and whether you can carry out your own market analysis and pick stocks like an expert.

Evaluating your needs and your skills as a trader

A direct NSE broker will place the sale or buy orders that you tell them to, and is ideally meant for people who trade in high volumes and perform their own market analysis. Trading companies on the other hand offer you a variety of tools to perform market research, and generally offer you higher Intraday exposure as well. As such, we always recommend our readers to opt for a trading company when they are getting themselves a trading account.

Brokerage charges can make a huge difference

Every time you buy or sell a stock, you need to pay a brokerage fee. This fee is usually small, but when you perform hundreds of trades in a month, all of this can add up to become several thousand rupees. It is always in your best interest to pick a trading company that has a low brokerage fee. There are also several brokers that offer you unlimited plans where you pay a flat fee per month and then perform as many trades as you want without having to worry about brokerage. Evaluate your needs and the company reputation carefully and you will easily find a renowned Indian stock trading company that can offer you a great deal. Some popular trading companies, and the rates that they charge as a brokerage for Intraday trades are:

  1. Indiabulls: One of the most well known names in the market, Indiabulls offer an easy way to trade stocks and charge you 0.05% commission. 
  2. Motilal Oswal: Another well known name in the Indian trading sector, the company does not charge any brokerage when you buy a stock. They levy a charge of 0.25-0.4% when you sell the stock. 
  3. Religare: With a brokerage fee of 0.6%, Religare are another great and trusted option for those looking for a trading company where they can open their account. 
  4.  India Infoline: A relatively new name in the market, but one that traders trust, India Infoline levies a fee of just 0.05% of the trades that you make using your account with the company. 
These are just a few of the popular choices available to you when you are out looking for Stock Trading Tips companies. Pick a service that offers you the best overall service, and quickly become a successful Intraday broker.