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Hedging is a sophisticated risk management tactic that entails purchasing or disposing of a security to potentially help lower the risk of a position's potential loss.   Image source: Trade Brains Individual investors do not frequently utilise hedging as a trading strategy, and when they do, it is typically done after the initial investment has been made. In other words, you wouldn't hedge a position before you buy or sell a stock short. To minimise potential losses for an existing deal if it moves against your expectations and in the opposite direction, that is the main reason to hedge. Supposing you believe your trade will eventually move in the opposite way from where you want. You could wish to hedge rather than close it out for a number of reasons, including: Overconcentration: You may want to mitigate some of the risks associated with a certain investment (such as business stock) if you have a high exposure to it. Tax repercussions: You might not want to sell ...

Is Titan's share overvalued/overpriced?  Image source: GoodReturns The company has given 7.64% returns in the last month,17.8% returns in the last 3 months, 38.91% returns in one year, 129.78% returns in three years, and 321.63% returns in 5 years.  The company's yearly sales increase of 33% exceeded its three-year CAGR of 13.16%.  The stock returned 129.89% over three years, compared to a return of 60.42% for the Nifty 100. The data completely indicate that the company's growth and return that they generate for the investor are massively outstanding. Can we invest from this point?  let's figure out the expenses of the company. In the fiscal year that ended on March 31, 2022, the company spent 4.68% of its operating revenues on employee costs and less than 1% on interest charges.  This indicates that companies' internal expenses are very well managed and comparatively very low. Titan Company Ltd. is the fifth-largest watch manufacturer in the world a...

It's a cyclic game. When you see a stock's price move up or down on a chart, that's supply and demand in action. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.  Another detailed economic reason: The government prints money and this money comes into the market. So the peoples have more money than earlier and they start to spend more than earlier. As people start to spend more so the prices of goods rises. Hence, due to this inflation rises.  The rate at which inflation rises is on average 6% p.a. so the price of the goods also rises at the level of 6%p.a. Hence, the goods get costlier than the earlier so the profit also increases. If the people buy more, so the profits of the companies increases. And if the government is increasing the rate at which they print money so people have more and they invest...