Inflation or the general rise in prices over some time, of all essential or non-essential commodities, is a reality of modern economic life. Inflation affects the basic costing index and therefore, the overall cost of living over some time in many significant ways. Needless to say that trading segments are one of the core areas which undergo the effects of inflation. Any steep rise in prices affects the purchasing and selling costs of stocks and leaves a marked imprint on the whole mechanism of market pricing. Being a goal-oriented and futuristic entity for trading affairs, Tradebulls has adopted an approach wherein inflation naturally figures as a calculable and projectable parameter. This approach has led Tradebulls to emerge as a trusted brokerage and consultation establishment with earned confidence of its patrons and the general public as well.
In the Indian context, inflation has steadily affected investment decisions and has been a resounding factor for decades. Effect of inflation on investment decisions and how people have even gained out of it can be understood from the following example:
Mr. TK, a garment shop owner by profession was already an equity trader when he decided to diversify and ventured out in commodities, about 10 years ago. Having some knowledge about the way market fluctuations work, before taking a decision, he researched carefully and with the help of a registered brokerage firm, surveyed the market extensively. Finally, he decided to invest in copper stock due to a particular projection forecast regarding the estimated costs. In stock trading, as experts at Tradebulls suggest repeatedly, long-term gains matter more than short term outputs. This is exactly what Mr.TK did, as he waited patiently. Due to the upsurge in demand for copper and due to the factor of inflation, he went on reaping accrued benefits and today is a highly successful stock trader.
In stock trading, where selling and distribution expenses are quite nominal, the cost of the article may be calculated without considering the overheads at all times. In a business where the nature of the product requires heavy selling and distribution expenditure, the calculation of due inflation and pricing may prove very costly to the business. For instance, prime cost includes expenditure on direct materials, direct labor and direct expenses. Money spent on materials is termed as cost of materials, that spent on labor is termed as the cost of labor and so on. It follows here that using the terminologies about cost without background information about the futuristic impact of inflation may be quite misleading in the market.
At Tradebulls, we understand that profit-making is the prime objective of any trading venture and this profit margin depends on two factors – costs and sales. It is the costing part wherein inflation matters the most as a determining factor in the long run. The objective being that costs should be minimized and sales should be maximized, due importance must be given to the projection of inflation as a highly targeted matter. This is where services of an experienced firm with dedicated professionals like Tradebulls are required.