How to classify the industry (Growth, Cyclical, Defensive) manage your risk with proper diversification.

By -
 Want to invest in the Stock Market but am confused about which INDUSTRY  should I invest in???

This is for you !

Industries basically work as per the Economy's (Expansion/Contraction)

There are 4 types of industries.

1. Growth Industry : 

  • New Start-up Stage in Industry Life Cycle
  • Solid Earning Figures
  • Risky Stock High Return.

 

2. Cyclical Industry:

  • Growth is dependent on Expansion and Contraction Of economy.
  • Include those that produce durable goods or heavy equipment.
  • People spend more when they have good income. E.g.. Airline

 

3. Defensive Industry:

  • Food Processing Industry.
  • Provides necessities for consumers withstand recession and depression.
  • E.g.. FMCG

 

4. Cyclic Growth Industry:

  • Both characteristics of Cyclical and Growth Industries.
  • Change in technology and intro of new models help them resume growth.
  • E.g.. Automobile.

 

Everyone wants to beat the benchmark. It can be Nifty 50, Nifty Mid Cap or any other INDEX.

 So attached video will help you to understand INDUSTRY for better decision making. What should be the optimum portfolio at the cycle of the economy whether it is contracting or expanding. 


 
Investor Choices



Comments

Post a Comment

Please do not comment any spam links.

Popular Post

What are the strategies for the growth of a business.? Business Life Cycle.

By -
Image
Are you an INVESTOR? Are you an Entrepreneur? Do you want to grow your Business ? 💰   "This is for you" If you are looking for an investment in any business, it can be in any form i.e Equity, Debt, or you have already invested in any business as an entrepreneur. So, it becomes necessary for you to understand where your business actually stands as everything works in the form of a 'Life Cycle' so our business also works in a 'Life Cycle'  Business life cycle can be classified in four stages. 1. Start Up Stage. 2. Growth Stage. 3. Maturity Stage. 4. Declining Stage.   To survive and grow from every stage there are some well known strategies which are taught in MBA as part of strategic management curriculum.    With the help of these videos you will be able to understand where the business stands and you will be able to understand what the decision is management taking at business level hence you will be able to immediately c...
Read more

2 most popular investment style ! Value Investing or Growth Investing

By -
Image
One wrong investment can evaporate all your savings, and one right investment can grow you like anything !  Very nice saying " The stock market is filled with individuals who know the price of everything, but the  value of nothing. ~ Philip Arthur Fisher When we talk about wealth creation it becomes necessary for us to understand what are the investment styles people have used in the past to create wealth.   And the answer is- There are broadly two most popular investment styles 'Value Investment' and 'Growth Investment'   1) Value Investment style:   Warren Buffet the master of Investment is majorly focused on value investing strategies. These strategies are for a long term basis and investment is done only those stocks which have just started performing good but price is not moving up or falling down.These stocks will be available at low Price to earning  and their 'intrinsic value' will be higher than 'market price'. Companie...
Read more

What is good P/E ratio ? Invest In High P/E Or Low P/E Stocks

By -
Image
Price to earnings ratio (P/E) Overvalued Or Undervalued???  Most common and wrongly interpreted term in the finance industry. Let us understand the concept of P/E   If the P/E is higher than that of comparable firms, it is said to be relatively overvalued, that is, overvalued relative to the other firms ("Not necessarily overvalued on an intrinsic value basis"). The converse is also true: if the P/E is lower than that of comparable firms, the firm is said to be relatively undervalued  ("Not necessarily undervalued on an intrinsic value basis"). Price to earnings is the ratio which shows how much respect the market is giving to a particular company for his future potential. Example: If P/E is 20 it means i am ready to pay 20 rs for every 1 rs earnings. Let’s move on a case study to understand the concept . Industry - Information Technology. Company A - P/E 20,  Sales - 100 Lakhs, Profits- 20 Lakhs Company B - P/E 80 , Sales -100 Lakhs, P...
Read more