Understanding the Role of Stock Advisors or Financial Advisors

Investment in stock is gaining popularity nowadays amongst potential investors across the country. As per a study report, it is estimated that active investment accounts have increased in number to reach up to 10.4 million lately. At the same time, retail ownership of stocks listed on the NSE or National Stock Exchange has increased to around 9 percent quite recently.

The overall potential of active returns and the temptation of owning a part of leading companies drive a number of investors to the stock market. However, are these investors capable of understanding the complex market on their own? This is where the role of reliable stock advisor in India comes in.

There is no denying the fact that the stock market is a complicated, technical platform. While the concept of buying and selling stocks might appear straightforward, it is not that simple. Every time you buy or sell a company’s securities, you are expected to back up your trading decision with proper research and the right trading strategy to get profits from.

It is important to understand that market movements are significantly impacted by human sentiments, and therefore, can be highly unpredictable. This is where financial advisors or stock advisors in India come into play.

Who is a Financial Advisor?

A financial advisor or a stock advisor refers to an individual with the required financial or stock knowledge and ample expertise to help others with effective financial management. This could include in-depth financial assessments, managing expenditure, and savings. Financial advisors also offer advice on the right products for investment while ensuring portfolio management and taxation.

Stock advisors or financial advisors have the right academic and professional qualifications to assist investors in their investment decisions. In some cases, advisors also offer specialized services from the domain of financial management, including tax planning, retirement planning, or investment planning. Some might possess more specialization with respect to services like offering advice related to stock investments.

What is the Role of Financial Advisors in Stock Investing?

These professionals can serve as stock advisors in the following ways:

1.    Help with Planning Finances

As you get the service from an experienced financial advisor right from the beginning, you can look forward to commencing your financial journey with the right foot forward. With their overall expertise, financial advisors can assist you in managing your finances by assessing your risk profile and understanding your unique investment needs.

Financial advisors are also responsible for listing down your overall expenses, income, liabilities, and assets. Based on the same, they will estimate the amount of savings you possess and what amount can be directed toward stock investing.

Financial advisors or stock advisors help you determine the exact part of your income that can be allotted to stock investing. This ensures that your other forms of investments do not suffer.

2.   Education About Inherent Risks

There is no denying the fact that the stock market is a risky platform overall. The prices of stocks tend to fluctuate almost daily, through which the market operates. This is because the stock market functions on certain factors, including market perceptions, occurrences in the international markets, economic movements, and the overall demand & supply.

These factors are responsible for bringing about major changes in the market within the same day, while leading to significant fluctuations in the stock prices. The fluctuations can be both positive and negative.

Stock advisors are aware of the existing market risks within the stock market and have ample expertise to deal with them. Therefore, they are able to educate you on this effectively. Moreover, they assist you in making an investment in the market based on your overall risk appetite. For example, if you happen to be an aggressive risk-taker, stock advisors motivate you to invest a major part of your income in the stock market. At the same time, if you are averse to taking risks, they will help you limit your overall stock investing such that you are able to tolerate market lows.

3.  Conducting Fundamental and Technical Analysis of Stocks

The factor that differentiates a good investor from a poor one is the choice of market or companies for investment. The number of stocks across NSE and BSE keeps increasing from time to time. If you are overwhelmed with the increasing number of companies on the listing, you can take help from professional stock advisors in India.

Choosing the right stock to invest in is not a simple task. You are expected to consider both the fundamental and technical aspects of the company before you put in your hard-earned money into the same. Financial advisors possess the right knowledge to understand any unforeseen data or predictions. They usually conduct an in-depth analysis of the stocks to shortlist the ones that have a higher potential of yielding better returns.

4.  Choosing the Right Stocks at the Right Time

Usually, you will come across three major types of stocks in the market. Large-cap stocks typically belong to large organizations that have a well-established reputation and a market cap of more than INR 20,000 Crores.

Mid-cap stocks refer to the stocks of companies having ample scope for growth and a market cap between INR 5k Crores and INR 20k Crores. Small-cap stocks belong to new & developing companies that feature intense growth strategies and have a market cap of less than INR 5k Crores.

There are certain risks across different types of stock investments. Based on your overall risk profile and financial goals, financial advisors tend to recommend the right stocks for your investment portfolio. Moreover, they also offer advice on the right time to invest in stocks to fetch you better returns in the long run.

Conclusion

When it comes to stock investing, financial advisors have an important role to play. They can serve as your mentor or guide to help you with stock trading with their overall expertise and knowledge. Verified and registered stock investors offer sound stock advice. You should always reach out to qualified financial advisors with ample expertise in the given field.