Share.Market: Revolutionizing Investing with Deep Insights Beyond Charts & Fundamentals Read on to discover how Share.Market, a discount broking platform by PhonePe, has disrupted the investment landscape with its endeavour to democratise factor analysis and other risk-mitigation instruments, in a bid to empower every Indian investor
Investment in stocks is arguably the only trade that has the enticing promise of creating vast fortunes and yet, at the same time, it also comes with a colossal risk of swift downfalls.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} India, with approximately 65% of its population under the age of 35, is captivated by the allure of the stock market, according to the 2021 World Population Review. Millions of Indians trade in stocks, and the ticker of new demat accounts never ceases to spiral.
The hope of recreating a ‘rags to riches’ story, however, is pretty short-lived for many investors. More than 5.3 million investors bid farewell to trading in the latter part of 2022 and the first few months of 2023.
The major reason to give up on the dream is an inability to manoeuvre the complex ways of the market. And, that is what Share.Market, a discount broking platform by PhonePe, aims to mitigate—by holding the investor’s hand around the dynamic landscape of investing.
How is the platform going to achieve that, is the pertinent question. The answer lies in factor analysis and more.
What is factor analysis?
Decoding the fundamentals of factor analysis was Vaibhav Jain, Head - Content and Education at Share.Market as part of the three-episode explainer videos, a knowledge series titled, ‘Beyond Charts and Fundamentals: Decoding Factor Analysis’.
Vaibhav said the platform has made access to and leveraging factor analysis easier through the creation of WealthBaskets accessible to the investor.
Some key drivers influence stock market performance as well as the performance of individual stocks. The science of scrutiny of these factors and leveraging them to mitigate the risks of trading is factor analysis. “It is about crunching numbers, to analyse data pertaining to stocks and make trends emerge,” Vaibhav said, in the first explainer video ‘The New Essential Tool for Investors: Factor Analysis’. “Factor analysis takes the guesswork out of the equation,” he added, unpacking the fundamentals of this intelligent investment instrument.
Watch the video here
“Factor analysis is gaining momentum in India. We, as a discount broking platform, are making it simple, effective, and easily accessible to the investor,” Vaibhav said.
Factor analysis, as a whole, encapsulates individual components, including:
Value Factor: Highlights the superiority of stocks offering substantial value relative to their cost.Momentum Factor: Emphasises that stocks showing recent upward trends are statistically more likely to continue their upward spiral.Quality Factor: Robust business fundamentals often make high-quality stocks yield better returns.Sentiment Factor: Markets are sentiment-driven. Investor’s sentiment towards the market or a stock can predict the further course.Low Volatility Factor: Low volatility means smaller price swings and higher volatility is the exact opposite.
Other factors include the Yield Factor and the Size Factor.
How to pick stocks by leveraging factor analysis
In the second explainer video ‘Practical Stock Selection: Leveraging Factor Analysis’, Vaibhav explained how investors can use these individual factors to make better decisions when picking a stock, using examples of real stocks, and their factor analysis.
“Let’s take the momentum factor and compare two real-life stocks: Asian Paints and Bharti Airtel. The Airtel stock has given positive returns across all time frames, while Asian Paints has been good in patches. This gives the former a momentum score of five and the latter a score of one,” Vaibhav said and argued that the score makes the decision, to choose between the two stocks, an easy one. “We will always choose the stock with a higher momentum score,”. This applies to sets of stocks as well, Vaibhav said.
Watch the video here
Building a portfolio using factor analysis
“Portfolio building is a superset of stock picking,” Vaibhav asserted in the third explainer video ‘Building an Investment Portfolio Using Factors’. “It is a group of stocks picked across sectors and market cap categories, complimenting one another in certain ways and ensuring that we as investors get sustained returns,” he explained.
Factor analysis makes the task easier and the choices more informed. The stocks picked in a portfolio should have decent or high scores across factors, instead of having a great score in one factor and a sub-par score on another.
“Having a portfolio where all the stocks have all the factors covered gives us the assurance that even if one factor tanks, the other factors will come to the rescue and save our portfolio from going haywire,” Vaibhav said, “This is a robust mechanism used across the world.”
Watch the video here
Disrupting the traditional investment landscape with intelligent investment products
Taking the dialogue on how Share.Market has disrupted the traditional investment landscape with its endeavour to democratise risk-mitigation tools forward was the CIO Sujit Modi in one of the two second executive conversation titled ‘Sujit Modi on the Future of Trading’. Sujit asserted that the manifestation of three broad steps of investment management—data collection, data storage, and data processing—has changed significantly.
“Earlier our teams used to collect data, including annual reports of companies, cash flow statements, notes to account, and so on, to be kept in Excel sheets. The data used to be analysed and flowed into a model template,” Sujit remarked.
“Technology has fundamentally altered the way research and investment management is being looked upon, and this positive disruption is going to stay here and it is only going to compound from here on,” the CIO added. He agreed with the assertion that positive disruptions lead to better investment ideas and better profitability for the investors.
Watch the video here
“A rapidly growing broking industry, driven by regulatory support for digital account openings and the rise of discount broking—offers glitchless onboarding and low fees. We recognised this trend and aimed to ensure people invested smartly,” Chief Executive Officer (CEO) of Share.Market, Ujjwal Jain, said in the other executive video conversation titled ‘From Vision to Market: The Share.Market Story’.
Ujjwal elaborated that Share.Market has integrated multiple factors into their product to create an “intelligence layer” tracking and updating every single stock daily.
Making things easier for traders and investors alike, Share.Market curates WealthBaskets based on in-house research. These baskets are updated regularly consolidating stock research in a single view, making investing easier.
Watch the video here
As Share.Market endeavours to democratise this technology and make it accessible to the masses at a retail level, watch the videos to understand its forward-looking insights into the future of investments.
To learn more about the EconomicTimes.com x Share.Market video series, visit the website. #sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} ( Originally published on Sep 02, 2024 )
This story originally appeared on: India Times - Author:Faqs of Insurances
