10 Easy Ways To Start Investing In The Stock Market
- Author Kelly Clifford
- Published March 6, 2010
- Word count 522
Investing in the stock market is often seen as something very technical. Indeed it can be daunting to think about stock market investing if you have no background in finance or economics. But the truth is that stock market investing, like any other skill, can be learned with enough background reading and analysis.
Investing in the stock market need not be an overly risky prospect if you know what you're doing. Follow the tips below to find the least risky and most lucrative opportunities to invest in the stock market.
Look for positive trends. Anything that tells you that the economy is growing, that a particular industry you're interested in is growing, is a positive sign to invest. To identify positive trends, open your newspaper and look at economic and financial growth charts. Or open up an Internet site like Yahoo Finance and see the tables and graphs there for trends and forecasts.
Look at past winners and chart their history and future prospects. Look at factors that made them strong. Analyze whether they performed well in both the good times and the bad times as this will give you an indicator of their stability when the going gets tough.
Follow a strategy of finding companies with strong management and a strong business ethos. To find such companies, look at reports such as those taken out by Standard & Poor on the health of companies listed on the S&P 500. You can also find out about a company's financial health by going over their public profiles, looking at their annual shareholder reports and calculating some basic accounting and income ratios to determine their prosperity or otherwise.
Be fully invested in a bull market while switching to evergreen and safer options in a bear market. Safer options include utilities, food and beverages and healthcare since these is a basic demand for these no matter how the economy is doing.
Become a value investor by closely analyzing a firm's net worth, income statement, book value versus market value, P/E ratios.
Find bargain stocks that have plenty of upside price potential that is not yet reflected in the stock price, and not one that has already reached its peak and is in decline.
Be on the lookout for a company's rise in earnings and rise in asset values coupled with a decrease in debt obligations
Follow companies that consistently receive good PR. This one's easy - check for companies that have been in the news lately for positive or innovative developments.
When a company is about to have a significant breakthrough, those with the insider information are usually the first to have wind of it. Be watchful for heavy director dealings.
Sometimes takeover bids result in a higher stock price because the move is a positive one for the company or the industry.
Be on the look out for the points we have covered before investing in the stock market. Doing so will help ensure that you pick strong companies and get lots of practice in correctly forecasting trends, a skill that will prove to be very profitable in the world of stock market investing.
Kelly Clifford from StockMarketsMadeSimple.com has put together a complimentary report titled "Stock Market Basics: A Beginners Guide To Understanding The Stock Market" that will likely prove invaluable in putting you on the fast track to becoming a knowledgable and successful Stock Market investor. To download your copy now instantly.. visit http://www.stockmarketsmadesimple.com/index.php
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