Nowadays, you can hardly go a day without hearing about stock exchange either from a friend or the news.
You can decide to invest in short or long term shares. Either way, you ought to have some background concerning how the stock market is run, current trends and be conversant with the terms used. This article is for newbies or average Joe’s trying to put a few bucks into practice or want to have a bit of more control over their investment. Stick around and let’s take a look at topics and tips that will make you a good investor.
There is no sure ‘thing’ in the stock market.
Companies such as Alibaba and ESPN seemed to be unshakable and could stand anything that came their way. The stock market is gigantic system which can affect any business, no matter how big you think it is. So don’t be 100% guaranteed that once you invest in a certain company you are going to earn big. One word is enough for the wise: you should not gamble all your money especially on private companies. It is advisable you take a shot over long-term investments.
Buy low and sell high.
Sounds so cheap, right? You have to scrutinize the market trends all over the world, especially in sectors that serve as major pillars of the economy such as fuel, food and technology. Long-term investment has proven to be the way and yet investment is still a rare part in most people’s lives.
Familiarize yourself with filings.
While a number of investors think they have all it takes to choose a good company, the rest of us are left to dig deep and do our homework well. In-depth surveys and analysis of each stock in the market by MF & Co. Asset Management or mandatory filings made through SEC by all public companies offer you a great starting point. Having such first hand information, gives you the best strategy to use and top shares to invest in that promise great growth rates. You can access SEC info online which include even the least expected details such as risk factors, potential conflicts, management commentary to growth plans.
There isn’t a perfect metric.
Professional investors just like amateur ones have their own way of determining value and growth rate such as profit earned, dividend ratios to the price-earning margins. Whichever the case, you can’t separate good stocks from bad ones because there doesn’t exist such a thing. A stock can look ten times cheaper and leap to five times expensive in a flash or the other way round.
Taxes take a bit out of your investment.
Selling stocks which have lasted for less than a year triggers taxation between 25% and 39.6%. This because they are treated as short term capital gains hence charged as ordinary income. However, if you can hold on for 12 months, the rates drop to 15% from one year marks a demarcation in the tax industry.
Long-term investment is the way to go.
Taxes aren’t the only drawbacks when playing short game investments. Automated quarterly return stocks are for well-established companies. You should seize the opportunity that comes with a sector which is overlooked by the stock market despite the constant stream of profit. Good examples are the railway and airline companies which were down at some point only to return with much power, giving those who invested in them good chunks of profits.
Set clear goals and know what you are paying for.
The stock market is turning to be a beehive of competition. Though the trading offers may sound great, have a clue on what type of buy and sell you are dealing with. There are different terms used, for instance, a market order will be executed when the market is opened regardless of the prevailing rates. On the other hand, the limit order will only sell if the limit parameter ms of the price agreed upon are reached.
Take the marketing news with a whole new perspective.
Stock market news act as gyrations giving different ideas on the current state and what is to be expected in the future. As a good investor, you should take these day-to-day news as interesting parameters rather than the basis of changing your strategy or for decision-making.
These are just a few tips that you should consider adding to your magazine to help you become a good stock investor. Above all, you should never use the price of one share to decide on your strategy. A shares may cost a hundred dollars, but it might not be the right choice. A five dollar shares aren’t cheap either.