Your Account Balance
MTF gives you upto 4X buying power
= 1,00,000 (25,000 x 4)
Thus, your enchanced Buying Capacity is now
= 1,25,000
Simply put – even though you have only Rs 25,000 in your account, you can still trade up to Rs 1,25,000. How awesome is that!
What is Margin Trading Facility (MTF)?
Have you ever missed a good trading opportunity just because you were low on funds at that moment? If you had Margin Trading Facility (MTF) this would have never happened. MTF allows an investor to buy a stock by paying just a fraction of the total transaction value. The balance amount is funded by the broker (such as Damruwale). You can avail up to 4x of your buying power via MTF.
Develop a Diversified Asset Allocation Strategy
When selecting stocks to invest in, you should carefully consider the risks of stock investing and develop a diversified asset allocation strategy that fits with your goals, investing time frame, and risk tolerance.
- Invest in approximately 20 to 30 stocks in at least six to eight sectors with different investment characteristics.
- No more than 20% of the total value of your stock portfolio should be in any one sector.
- No more than 10% of the total value of your stock portfolio should be in any one stock.
- You should invest a minimum of approximately 3% to 4% of the total value of your stock portfolio in each stock.
Deciding which stocks to invest in can be difficult, especially if you have a low tolerance for risk. That’s why it’s important to define one’s financial goals and how much risk can be tolerated. Research stocks that fit within your strategy and invest in stocks that have the potential to help you meet your specific goals, whether you want investment growth, income, or a combination of the two.
Your Financial Advisor can provide you with a wide range of stock investing services, including:
- Asset allocation strategy development
- Individual stock selection
- Help in deciding when to buy and sell your stocks