Don’t let market symptoms of share value win over you!

I find investors in Indian share market and also in other countries a bit balled up regarding the understanding of share value and share market. An upsurge in the share market is always a favorable event for investors as they tend to get attracted by the growing share value and buy them in hawkish manner. Similarly, the converse is also true when market declines and share values drop compelling investors to get rid of shares quickly. I can well understand the plight of an investor who is enforced by the share market symptoms to decide upon selling or buying. Putting in a simple way, share market decides the investment portfolio of investors who cannot make the distinction between share value and share market.

It apparently gives me a picture of seesaw where all investors tend to crowd at the same side failing to enjoy the real fun of oscillation. Striking a balance in financial market where the share values are subject to volatility is not an easy task, yet smart investors can do it efficiently. There is a need to change the way of looking at a share so that an investor doesn’t have to succumb by the forces of share market.    Most investors have the tendency to take a share as a widget. This diverts them from the real meaning where the share value defines the value of the underlying business. Owning a share of a company is in reality owning a company stock which offers ownership, no matter how small it is. Do we ever see that an employer sells off his business when the business worth gets lower by say 15%?   The reply is surely no. A business may have a less earning in a quarter because of its policy of expansion in a new geographical region or may be some other reason. The employer in this case acts with a business-approach, whereas a share holder in this case doesn’t follow suit with the employer. A share holder, looking at the fall in share values, decides to sell off the share immediately. And eventually the investor falls prey under the share market symptoms which shows a reduced share value at a certain point of time.

A businessman like approach should be developed within an investor to make his movements independent from the perils of share market symptoms. A constant study of the companies, whose shares form the investment portfolio, is inevitable. The power of knowledge can never be ignored and investors should take full advantage of analysis reports of various broking firms and equity and share research institutes to make his moves in the market smart and independent.