Why should you not buy inactive share?

Click here to Enjoy Live SHARE MARKET Commentary and for NSE & MCX

Inactive shares are those shares that do not generate income for the investors. This type of shares is highly dangerous for investors in the share market. Do you know why should you not buy inactive share? Well there are many reasons and you have to know it well so that you do not buy it as it would hamper you financially. Some of the reasons why one should not buy such types of shares would be discussed here.

Decreases the earning
When you buy inactive shares, it might decrease the earning of the prospective investors. It would not give the investors the fair return on the capital invested in the share market. Instead of getting the value of the shares or stocks the investors might land up paying of the shares. The shares might give a negative return on the capital invested. The investors might not even get back what they actually invested in such types of shares. There is every chance of getting a big shock of losing the shares. So there are reasons for not buying inactive shares.

Investing in the right stocks
Before investing in stocks, you should know when and where to invest your money. It is better that you invest your money wisely in the market. You should never be impatient and try to make a good research of the stock market. There are some basic problems that many investor faces when they go for an investment. So your goals should remain focused and you should try to make a good understanding of the working of the stock market so that you do not let your cash go waste.  You should always make a proper research of the stocks before you wish to invest in the market. Only from your research, you would be able to understand whether you would be able to gain good benefits or incur huge losses from your investment.

Subscribe to newsletter
If you wish to buy stocks online then it would be of great help if you could subscribe to a newsletter. You will find all information pertaining to the different stocks available in the market. If you do not have enough time to go out and research on different stocks available in the market, then you should always go for newsletter where you can come to know which stocks could help you make more profit.  You will also find different softwares where you can know where and when to invest in your stocks. So, if you have got the ultimate tools and resources, then it is quite sure that you can make lots of money in the stock market. You might have heard of day trading, right? Many investors do not go for this type of trading as they think this to be very risky and there are many regulations that are required for brokerage firms. They should have prior trading experience before entering into the market and also the clients should understand the risks of this type of trading. You should have some knowledge about NSE, BSE, NASDAQ…etc. Then there are some traders who use real time filtering software that is programmed to send stock symbols to a screen that meets the specific criteria during the day. If you fail to choose the ultimate stocks for you then you might have to bang your head as you would lose a lot of money from your pocket.

Other reasons for not investing in inactive shares

Coming to the inactive shares, the investors might not be able to re-sale the shares to other investors. The shares may or may not be recognized by the investors or the governing body of the share market. So you have come to know why should you not buy inactive share? Remember that if you happen to buy these types of shares it might give you a negative return in the futures. The investors must also have the willingness to see that the shares so purchased or brought are not the inactive shares otherwise he might lend up in a difficult situation. So you should keep yourself updated so that you could get the profitable stock.

Click here for Indian stock market tips