Wednesday, November 1, 2017

What Does It Take To Pick A Great Stock Investment? - To A Regular Joe & Josette



Stock graph money upward arrow Profitable investments
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   What affects our financial system? What gets the markets roaring? 


   With all it's up's & downs, fluctuations, peaks, dips, candles & trends . Why is this market a trend anyway? What happened this day that didn't happen yesterday?

   In piecing together a simple insight into the inner workings of the functionality within our stock market! One can only hypothesize. There are no magic wards, you can't input a formula and out materializes an interpretation. 



   In today's intricate world of business finance, those who study, move, react on a hooch & clues, are the ones who most likely will not only survive but will also end up on the wealthier side of the equation.


   
However, that is easier said than done. 

   Wall Street & the financial district is ALL about money. Lots & lots of money! 

   It is estimated that some $2+ trillion passed through this district everyday.  

 Everyday......? Phew!


Stacks of Neatly stacked 100 dollar Bills
   Money is power & power is money. And there's nothing easy about getting to it neither. 


   Man has for centuries done every conceivable act, scheme, deed, venture & jobs to get their hands on as much of that dollar dollar bill as they can possibly have. And when they do......they want more. 

   It's out there, money, wealth & riches that for sure. The bigger the payout, the bigger the risk one will take.

 The same with the markets.......

   What is the strategy for your investments? Are you looking for a long term or short term investments? 

   These two channels makes a world of difference.

   Long term, being 10, 15 - 20 years that requires you to sit and be patient. These can be medium to minimal risk. Generally called "Buy & Hold" stocks. These are the seeds you plant now . Then you nourish them through maturity and growth. You are building a passive wealth over time especially in what is called compound interest. Reinvesting your dividends  (profits) back into more shares. 


Stock Investment Money Buy Sell Invest Hold Long term Short term
   Short term goals, couple of weeks to under 3 years. Generally, short term gain offer reasonable yield. These are your bank type saving accounts, CD Certificates of Deposit, money market (index) funds, treasuries or bonds. That are less risky.  Trading stocks in the short term game results in higher taxation issues, profits eaten away through penalties & transaction fees. 

   Even shorter term  investing is available. If you enjoy sitting around in front of a computer all day where the operations  are the same yet trading is done in as little as the same day. 

   Day trading,  buying on the fluctuation of the markets. Buy low then sell high and make a quick profit. A bit riskier of course as mentioned above, idea here is to make a little here & there multiple times throughout the day to make it worth while.

   These are just the tip of  iceberg when it comes to the workings of the stock market for a gain. Still, what are some of the barometer in determining a decent playing field? 

How does one began to get a little dirty in the world of trading?


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  To start with, companies you know. Understanding the company or industry is of most importance. When you know something about the industry you are investing in. You can interpret other actions that surround that business. 

Example: 
   Let's say you are investing in the automobile industry.  Because you work as a car salesperson, you are close to the action. You have meeting on the car buying experience, your know when car buying is heaviest and in it's slow periods. 

   Other insight maybe the amount of mechanical issues a particular model might have. You get immediate feedback from consumers on a wide variety of subjects that ordinary people just are not privy to. 

   These bits of information can provide you a general feel on what direction that company is heading . If you know that consumer are not happy with the style or performance you then understand that will have an impact on sales within that company thereby influencing the value of your stock.


Road sign displaying Investment with arrow pointing up
   Another indicator, looking at the markets for stocks that have hit a first time all-time high. There might be something going on there. Research to see has there been any improvements that may have a connection to this company. Has there been an sales inquiry or talk of merger.

   
   These are some tell-tale signs to be watchful for. If you are going to do investment for a gain. It is most certainly a safer strategy to go long-term or "buy & hold". This requires you buy your shares and hold on to them for 10, 15 or 20+ years.

   Blue chip companies are great long term prospects. Watch for great book-keeping, solid management, future projects. 

   Which takes us to a crucial element in stock trading. Understanding the companies overall value or it's market (cap) capitalization. What debt has it accumulated or it's (EV) enterprise value.  


EPS + P/E RATIO  

You are hoping for returns (profits from the company shares) it's best to look at your earning per share (EPS) growth. While this is a pretty good indication of the companies profits measurements.

What are the trends? 

   For instance,  tech & energy stocks are doing well these last few months. Pay attention to the trucking industry. Up ticks in the sales of trucks is a slick indicator that businesses are busy. People buying goods is always a great economical indicator.

   Here's a few industries that are poised to do very well over the next few years:
  • Sustainable Renewable Energy 
  • Artificial Intelligence AI, 
  • Deep learning, Machine learning
  • Drone Technology 
  • Electric automobiles, 
  • Solar power
  • Cannabis (especially medical marijuana)
  • Biotech 

        ........are just a few to name.

In picking stocks, one must think in terms of sub-groups. What are ALL the factors that surround that company?

   See within each of these individual industries are other industries. Supply chain as they are called. Suppliers of the materials in process to the finished product.

  
  In the sustainable renewable energy field, you have solar, wind, turbine, hydro. Artificial intelligence requires chips & processors. 
Drone technology will need visual equipment and landing fields, operators, technicians and businesses that will utilize these drones. Solar power uses panels, installers. 
The medical & recreational cannabis industry will set off an agriculture boom like no other. 

   See where I'm going with this. The companies that supply the raw materials to a popular product, say like smartphones & earbuds etc. Great investment opportunities.

   Using this thought process as a foundation. Along with some other technical indicators which we will tap into as we move forward. Will help influence your confidence in your trade, buying & selling strategies. 


DISCLOSURE: This post contains sponsored ads and I will be compensated if you make a purchase after clicking on my links.

   
   Please remember this, my one soul purpose is to post information expressed in as plain & simple to understand terminology. No fancy wording or path to complex that you can't get out there and get a piece of your own company. Build a nest egg and wealth as the wealthy have done continuously for decades. Try not to read to much into the steps. It is a learning process, let it happen. As you learn to crawl, then you learn to walk which will lead to running. 


Life isn't that complicated, we just tend to make it that way!

   There's all kind of money out there floating around. The plan is to get sucked up in that whirl wind and ride it like the riches of the rich. And ALL You have to do is what they do.


Money is not evil.......Humans are their own culprit!




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DISCLOSURE: This post contains sponsored ads and I will be compensated if you make a purchase after clicking on my links.