#Budget2014: 7 tips for laymen on investing in the stock market

If you have always felt wary of the stock market and hesitated about investing, here are a few easy tips for you to boost your confidence and increase your earnings.

1. Look for a strong brand or patent company to invest.

2. See the promoters shareholding pattern. If the promoter’s stake is greater than 60%, they believe more in their business model and can’t fool you.

3. See the Dividend Payout Ratio. If dividend yields are better it’s a value stock.

4. Don’t follow the word on the street. It is always an exit for smart people.

5. The simplest strategy to follow is to compare prices relative to previous December closing. If prices are above December closing we are in Bull market or uptrend, and if below, it is a bear market or downtrend. December is NAV game play for all FIIS, so that’s the psychological factor.

6. When Sensex Price to Earnings Ratio falls below 10, it is a good time to buy in good quality stocks for long term.

7. Huge rush of IPO and that too by size of 10000 crores is a sign of critical market top. Last was Reliance Power in 2008.