Investing in the equity Markets is always fraught with risks owing to the effects that market forces have on them. Market forces refer to the factors apart from the company’s own performance, that drive the price of its shares in the equity market and can include inflation, the economic strength of the market and other competitive players, trends, liquidity, news, market sentiment as well as government policies. For instance, the loosening up of government regulations can positively impact share prices. Thus, the equity market is quite volatile owing to a variety of reasons aside from the company’s own performance.
The risks inherent in the equity market have led to a surge in ULIPs, which offer a wider portfolio of investments including both equity and debt, which ensure that an investor has access to both low-risk debt funds which offer lower returns as well as to equity funds which definitely offer higher returns but also are riskier owing to the factors mentioned above. Bajaj Finserv MARKETS, offer some of the best investment plans in India owing to the high amount of ULIP returns they have ensured investors over the years. Among these, the Bajaj Allianz Life Goal Assure plan has shown some of the best fund performances in the country, especially since it’s catered specifically to create a corpus for achieving a specific goal.
The risks of investing in the equity market can be averted through a thorough technical analysis of the market. Here is a beginner’s guide to conducting a technical analysis before entering into the equity market:
1.Identifying your strategy or developing a trading system:
This is the first step towards beginning a technical study of the equity market. You must either identify a strategy for technical analysis or develop your own trading system. For instance, you could choose to track two moving averages on a particular stock price movement. If the price increases at the short-term moving average above the long-term moving average, it indicates a positive trend for the stock and you could buy it to yield high results. However, if the price at the short-term moving average is lower than at the long-term moving average, it is indicative that you should consider selling your shares.
2.Identifying tradable securities that align with your trading strategy:
Not all securities will align with the trading strategy you may have decided to go with. Tracking two averages, like in the instance mentioned above, will work well for stocks that are highly volatile and liquid; while for stocks that are not as volatile or liquid, you might require different parameters. You could maintain a lesser difference between the short-term and long-term moving average for stocks that are not very liquid or volatile at all. With ULIPs available on Finserv MARKETS, you are offered the flexibility to switch between funds at any time you wish. Features such as these ensure that the best ULIP plan will allow you to protect your capital. Bajaj Allianz Life Goal Assure ULIP, which has a maturity age of 75 years, allows you to make partial withdrawals with no extra charges and has displayed some of the best fund performances in terms of investment and wealth creation over a long time.
3.Finding the right brokerage account for conducting your trades:
Whether you decide to trade through your bank or a broker or an agent, you must get yourself an account that supports equity trading. The account must offer options for tracking and monitoring the stocks you are trading in, and should allow easy functionality which you could access from anywhere. With the best ULIP plans, you also get access to assistance from market advisors who can study the market better and inform you about placing your funds accordingly.
4.Selecting an interface for tracking and monitoring trades:
Different kinds of traders require different kinds of interfaces for tracking and monitoring the trades they engage in. While day traders may require a margin account that ensures access to market maker visibility, the instance covered above could be possible with even a basic account which is definitely an option for those looking to keep the costs low while trading.
5.Identifying other applications you might require to implement your trading strategy:
Other features that may be required to effectively implement your trading strategy need to be identified and integrated right from the start. For instance, some traders may require mobile alerts as well as the functionality to trade on the go; while others could use automated systems that can be set up to trade on their behalf. Additionally, you could backtest trading strategies to understand what has worked previously in the equity market.
Though trading in the equity market has long been viewed with a certain level of mistrust owing to their frequent fluctuations due to external factors, performing technical analysis is the best way to get started on investing in the market. Bajaj Allianz ULIPs, available on Finserv MARKETS, have displayed some of the best fund performance in India owing to the high returns they have consistently provided investors with diversified portfolios which also offer high flexibility if you wish to switch between funds at times when the market is experiencing high volatility. Bajaj Allianz Life Goal Assure ULIP offers a choice of four investment portfolio strategies and eight fund options, allowing you to constantly monitor the market and move your funds in accordance with market forces.
Head to Finserv MARKETS to read more about what is ULIP and what are the types of ULIPs available.
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