Knowledge Series X : Forecasting Exchange Rates

- Purchasing Power Parity (PPP) :The purchasing power parity (PPP) is perhaps the most popular method due to its indoctrination in most economic textbooks. The PPP forecasting approach is based off of the theoretical Law of One Price, which states that identical goods in different countries should have identical prices.For example, this law...

ROE and ROCE – Know the Difference between ROE & ROCE

When it comes to investing for longer period in financial market, making decision without knowing the companies well; may result in losses. It is always important to evaluate a company on many parameters before making investment decision. Financial Statements – Balance Sheet, Profit & Loss statement, Cash Flow statement along...

Types of Economic Recovery

Economic recovery can take many forms, which is depicted using alphabetic notations. For example V-shaped recovery, U-shaped recovery, elongated U-shaped recovery, W-shaped recovery and L-shaped recovery. The fundamental difference between the different kinds of recovery is the time taken for economic activity to normalize. In this article, let’s try to take a brief...

Why diversification is important for Portfolio.

Series – V: Why diversification is important for Portfolio. Diversification is a risk management strategy that involves investing across or within asset classes to reduce the overall risk of an investment portfolio. One of the most important foundational principles of investing is to ensure that you have a diversified portfolio....

Know THE COMPANY before investing

Series – IV: Know THE COMPANY before investing Buying a stock means investing in a company. Most retail investors lose money because either they buy the stock for trading and if it results into loss, they become investor or they try to catch the falling knife. There could be a...

Understanding Options – Call Option & Put Option

Series – III: Understanding Options – Call Option & Put Option Volatility is an inevitable part of stock markets; it is arguably one of the most misunderstood concepts in investing. Investing is inherently about risk, but risk works both ways. Each trade carries with it the risk, both, of failure and...