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Difference Between Investing And Trading

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Many people are confused with what is trading and what is investing. Investing and trading are two very different systems of trying to profit in the monetary markets. The biggest difference between them is the length of time you hold onto the assets. An investor is more interested in the long-term appreciation and a trader is more interested in the short-term.

Iinvesting in stock market is like buying an asset and holding it for a long time. Many Investors buy stocks for long run and then sell them off in giant profit. Some big investors such as Warren Buffett have made more money in Long Term Investing. Trading on the other hand, it is like buy stocks for 2-4 Days. In these unstable markets it’s very difficult to make good profits in intraday trading, some traders planned to buy stocks for short term and then sell them off in profits.

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Many investors suffer such losses often, hoping that in five or ten years the market will bounce, and they’ll recover their losses and complete an overall increase. Most investors need to remember that investing is not about enduring tempests with your “beloved” company – it’s about making money. Traders are trying to profit on just those short-term price oscillations. The amount of time an active trader holds onto an benefit is very short. If you can catch just two index points on an average day, you can make a relaxed living as a Trader.

Tthe goal of investing is to slowly build prosperity through the buying and holding of stocks, mutual funds, bonds and other investment instruments. Trading includes the more frequent buying and selling of stocks with the goal of producing returns. Trading profits are produced through buying at a lower price and selling at a higher price within a relatively short period of time. Where traders must make profits (or take losses) within a definite period of time, and often use a protective stop loss order to automatically close out losing positions at a predetermined price level.

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Foreign Direct Investment And Foreign Indirect Investment

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FOREIGN DIRECT INVESTMENT(FDI):

Any non-resident investment in an Indian company is direct foreign investment. Foreign direct investment is in contrast to portfolio investment, which is a passive investment in the securities of another country, such as stocks and bonds.

The Indian system of administration and governance is impregnated with flaws like shortages of power, bureaucratic hassles, political uncertainty, and infrastructural deficiencies. In spite of all these political shortcomings, India is perceived to be one of the most lucrative grounds for investing, in the eyes of the wealthy European as well as American investors. This is the true reason why the researches made into the sector establishes more and more foreign investors coming to India and investing liberally into the various sectors of the Indian economy.

Various Indian market sectors have experienced a recent progress and boom, owing to the investment made in them as well as due to the relaxation of rules and regulations that had been levied on the foreign direct investment in India, by the Indian government. The Indian law permitted only the non-resident Indians (NRIs) or persons of Indian origin (PIOs) to make foreign direct investment in India. Even these people had been levied with many restrictions. With these restrictions, a host of foreign investors and companies stormed India with their products, services and business ideas along with their money. This money in turn helped the Indian economy to grow in volume as well as statures.

Many major industrialists and business tycoons expanded their businesses to India with the boom of foreign direct investment in India. Japanese and Korean firms and businesses houses have always trusted for foreign direct investment. Many of the Indian sectors have thus benefited and in turn given lucrative returns to the investors as well. This is the reason why most of the investors keep looking towards India as a venue for investment.

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FOREIGN INDIRECT INVESTMENT(FII):

If the Indian investing company has foreign investment in it,an Indian company would have indirect foreign investment. Foreign portfolio investment is the entry of funds into a country where foreigners make purchases in the country’s stock and bond markets.

The foreign investment through the investing Indian company would not be considered for calculation of the indirect foreign investment in case of Indian companies which are owned and controlled by resident Indian citizens and/or Indian Companies which are owned and controlled by resident Indian citizens. The indirect foreign investment in only the 100% owned subsidiaries of investing companies, will be limited to the foreign investment in the investing company. This exception is made since the downstream investment of a 100% owned subsidiary of the holding company is akin to investment made by the holding company. This exception is strictly for those cases where the entire capital of the downstream subsidiary is owned by the holding company.

To calculate the foreign indirect investment, we have company X and company Y. The following would be the method of calculation:

(a) Where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y.

(b) Where Company Y has foreign investment of say 75% and:

 1)invests 26% in Company X, the entire 26% investment by Company Y would be treated as indirect foreign investment in Company X.

2)Invests 80% in Company X, the indirect foreign investment in Company X would be taken as 80%.

3)Where Company X is a wholly owned subsidiary of Company Y then only 75% would be treated as indirect foreign equity and the balance 25% would be treated as resident held equity. The indirect foreign equity in Company X would be computed in the ratio of 75: 25 in the total investment of Company Y in Company X.

Emerging Market Economy(EME)

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A nation’s economy that is increasing toward becoming progressive, as shown by some liquidity in local debt and equity markets and the reality of some form of market exchange and controlling body.Iinvestors often experience faster economic evolution as measured by Gross Domestic Product(GDP).

An emerging market economy has per capita returns to the lower-middle range if calculated by world incomes. The emerging market economies such as India, Pakistan, China and Vietnam are the major success stories of the world. The developed world consists of settled markets in North America, Western Europe and Japan.

Many emerging market economies become important sources for global business processes and enjoy prosperous export business. As they take place in global fair, many emerging markets also profit from controlling changes, cross-border profession and loose monetary policy. The increased investment on infrastructure by the foreign investors in these emerging economies has seen better conveniences and situations here for other investors to invest in the future. Emerging markets have the important characteristic of profession liberalization and opening up their economies at the global stage.

While emerging economies with full room to grow have the latent to expand much faster. Going forward, this growth should convert into superior trade effectiveness and impressive gains for investors.

Emerging markets are looking to withstand their growth. The mainstream of companies in emerging markets are choosing to invest additional cash back into the company rather than making extensive bonus charges to their investors.

Emerging markets bring a much higher risk than the average investment because their stocks can be quite unpredictable. Investments in emerging markets come with much greater risk due to political volatility, national infrastructure problems, currency instability and limited impartiality chances. Also, local stock exchanges may not offer melted markets for external stockholders.

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E-mail, video conferencing widely used in Indian workspace

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Nine in 10 Indian workers use e-mail, followed closely by eight in 10 who use video conferencing, and three-quarters who use team sites/intranets.

In India, usage levels of these tools tend to be higher than in most other markets across the world, a Microsoft study said on Wednesday.

The most prevalent social tools in the Indian community are also those recognized by workers as the most useful and encouraged in the workplace.

External social networks, microblogging and internal social networks are restricted by one-quarter of Indian organizations.

The survey conducted for Microsoft by research firm IPOs said seven in 10 workers feel that security concerns are to blame for the restrictions, while 6 in 10 feel the restrictions are due to productivity loss.

However, 71 per cent of respondents feels social tools have actually helped to increase their productivity.

Likewise, seven in 10 feel social tools have increased workplace collaboration, and their company recognizes the value of providing social tools – more so than in most other countries, it said.

“Employees were already bringing their own devices into their workplaces, but now they are increasingly bringing their own services as well,” Charlene Li, founder and analyst at Altimeter Group, a firm that studies social media and other technology trends, said.

The survey that included 1,825 employees across the APAC region also found that 40 per cent of employees feels there isn’t enough collaboration in their workplaces and that social tools could foster better teamwork.

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Market Review of 25 May 2013

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Indian equity markets witnessed some recovery on Friday after suffering a sharp set-back in the previous session, partly stoked by worries of Fed unwinding its monetary stimulus earlier than expected and partly tailing the brutal massacre in Asian counterparts. Benchmarks, snapping four consecutive sessions’ declining streak, notched higher, as investors’ saw the recent dips as the opportunity to enter into the market. However, the gains of local equity markets remained quite restricted on account of cautious approach by select traders going to the F&O expiry week. The benchmark 30 share index, Sensex gaining over a quarter of a percent, ended above the psychological 19,700 mark, while widely followed index, Nifty, gaining similar magnitude of gains, ended just shy of the crucial 6000 mark. Broader indices too enticing traction for the session went home with gains of over a quarter percent. Despite negotiating a positive close for the session, both benchmark equity indices, Sensex and Nifty, snapped the week, with a colossal loss of over 3%. For the week, NSE Midcap index plummeted by 4.5%

Larsen & Turbo, which climbed 3% after the recent sell-off in the previous two sessions was seen as overdone, mainly lifted the Capital Goods (CG) sector higher. Meanwhile, banking space was mainly led by private sector banks. Stocks of ICICI Bank, HDFC Bank and Yes Bank gained in the range of 0.50-2.50%. On the flip side, due to sharp plunge of Wockhardt, Health Care Counter was the worst performer amongst the sectoral space, following the suite were stocks from Information Technology and Auto counters.

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