Here’s everything you need to look out for when researching stocks you want to invest in!
Research is important when it comes to choosing what to invest in, but you might not know where to start or what to look for. So here are a few things you’ll want to look at:
One - Start by looking at companies and brands you already know and trust. If you’re always shopping at a particular store, using a specific bank, or loving a certain brand, check if they’re listed on the stock market. If you love them, chances are, other people do too, and that could mean consistent growth.
Two - Look at the leadership. A company is only as good as the people running it. Who’s in charge? Do they have a track record of success or a history of mismanagement? Good leadership can help a company through tough times, while bad leadership can drive it into the ground so this is important.
Three - Look at the industry. What’s the outlook for that industry? Is it growing? What are the opportunities and threats?
Four - Do they pay consistent dividends? If earning a consistent income from your investments is one of your goals, check the company’s dividend yield and their track record of payments. Some companies pay regular dividends, which means you get a portion of their profits just for holding their stock. However, others reinvest profits to grow the business instead so don’t assume every stock will pay you dividends.
Five - Examine the financial statements. Is the company profitable? Is revenue growing? Does it have good cash flow? How is it managing debt? Strong financial performance is a good indicator of where the company might be headed.
You don’t need to be a financial expert to do basic research on stocks, you just have to pay attention!
What’s the first thing you look for when choosing a stock? Let me know in the comments!
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