Stock Market | Day Trading | Property Investing | Passive Income: The 4 in 1 Investment Guide: How to Analyse Opportunities, Trade Stocks, Generate Passive Income and Reach Financial Freedom by Bradford William K

Author:Bradford, William K. [Bradford, William K.]
Language: eng
Format: epub
Published: 2020-06-15T16:00:00+00:00

How to choose the right stocks for trading?

Stocks are perhaps the most common investment tool on the market. They are suitable for both beginners and professional investors. Let’s figure out how to choose and buy suitable stocks.

Choose the scope of the company

The choice of the industry should be based on your interests and experience. For example, if you get the hang of interiors, pay attention to manufacturers of furniture and household goods. If you are into computer games - take a closer look at game developers and video card manufacturers. It is better to choose not one industry, but several, as you will need to distribute your investments. You will be better versed in companies that affect your personal or professional interests.

Explore companies in the chosen fiel d

Compare companies of the same industry: maybe right now dark horses demonstrate better results than recognized industry leaders. To do this, go to the website of the exchange you are interested in (MICEX, NYSE or NASDAQ) and get acquainted with the list of traded assets.

Of course, to become a shareholder of a large company - this sounds good and more reliable. However, it is also impossible to deprive the attention of second-tier players, since their shares can rise at any time. Such ups can make shareholders wealthy. Make a list of companies that you find interesting. Each of them needs to be thoroughly studied.

Look through the company profile

Work through all the available information about the company. How has it developed? How was it transformed? How did important events in the company's life in the past affect the movement of its shares? What are the plans for the future? Quite often, the vector of the company's movement in the past determines its future development. Pay special attention to profit and loss statements.

Pay attention not only to achievements but also to serious failures. It is important to understand how the company copes with difficulties and what happens to its shares at this moment. This will help assess your risks at the start. Do not forget about liquidity: the company and what it produces should be liquid, both now and in the future.

Learn Company News

The company's plans directly affect your income from investing in it. If the company plans to release a new product, if it has made a discovery, it can play into your hands. Everything brand new generates interest and, therefore, increases the likelihood of rising stock prices, although it is not a guarantee of quick returns. For example, a change of leadership can both positively and negatively affect the business of the company, and hence its value. Do not also think that companies always grow rapidly. Shares of many heavyweight corporations are growing slowly, but confidently.

Explore company and industry dynamic s

Evaluate the dynamics of the company and the industry where it operates over the past few years. If the growth rate is falling or even worse negative, then looking in this direction doesn’t worth it. Buying stocks after a period of sharp growth is like jumping into the last car of a running train.

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