Introdution to Stock Market For Dummies
Stock investing can seem confusing. Fortunately, the Stock Market for Dummies information makes it easier to understand, because investing in stocks is smart.
Here we want to highlights the most important steps and recommends researching a company before investing. There are several easy ways to use Internet tools and resources to make the smartest investments.
If you have trouble understanding you can refer back to stock market for dummies audiobook
10 Important Tips To Remember
Stock investing can be fun and much easier when you commit to it. If you want to make money by investing in stocks, please remember these valuable tips.
Stock market basics:
- Remember you are buying a company and not just a stock.
- If you buy stock in a company that is not making profits, you are taking a big risk.
- The main reason to invest in a company is because it is earning profits.
- Stocks should never make up 100 percent of your assets.
- Stock prices depend on the industry, environment, economy, politics and the company.
- At some times, stocks are not a good investment.
- Always have a good explanation why you want to buy a certain stock.
- Use common sense and logic when picking stocks.
- Always monitor the success of stocks, and sell them if it is necessary.
- If you need to learn about a company's prospects, use stop-loss orders.
Research Companies Before Investing
The Stock Market for Dummies makes a good recommendation to research a company. There are specific things you should look for. Before you make an investment, the Stock Market for Dummies says to always know theses details about the company:
1. The company's earnings should be 10 percent higher than the year before.
2. The company's debt should be the same or lower than the year before.
3. The company's debt should always be less than its assets.
4. The company's sales should be more than the year before.
5. The company's equity should be higher than the year before.
Stock Market For Dummies - Important Financial Issues
The Stock Market for Dummies recommends researching a company's finances. If you know the company's financial ratios, you will not have to waste your money. A bad investment could mean you lose your money.
However, the Stock Market for Dummies says a well-researched investment can bring you more money. A company's financial profile will show how stable it is. You have to look carefully for these points:
- Return on equity should be 10 percent higher every year.
- Price-to-earnings ratio should be less than 20.
- The price-to-earnings ratio should never be higher than 40 for any stocks.
- Price-to-sales ratio should be close to one.
- The debt-to-asset ratio should be less than 50 percent of assets.
- Earnings should always be higher than 10 percent of the year before.
- Make sure the earnings ratio is higher every year for several years.
If you invest in a company without reading this information, you could lose your money. The Stock Market for beginners says these information reports are important to read:
- The company' 10K and 10Q reports from the SEC.
- The company's annual report.
- Standard & Poor's Stock Reports.
- Wall Street Journal.
- Investor's Business Daily.
- Information on reliable stock investing Internet sites.
- The Value Line Investment Survey.
Use Reliable Information
The Stock Market for Dummies says it is important to use good information. There are many sites offering information on the Internet.
However, only some of them provide reliable investment information. Using bad information could cost you a lot of money.
The Stock Market for Dummies recommends these sites:
- Financial Sense
- King World News
- Yahoo! Finance
- The Ludwig von Mises Institute
- The U.S. Securities and Exchange Commission
- Keep A Positive Attitude
Stock Marketand investing experts say you should stay optimistic. Having a positive attitude is important. Your goal should be to build long-term wealth. To do this and to avoid stress, you should follow these tips:
- Always invest in stocks from companies that are profitable.
- Invest in stocks from companies that sell necessary goods and services.
- If you keep your investments diverse in other options, you will be safer.
- Keep assets and cash in your bank to increase your financial safety.
- Analyze your portfolio every day.
- Watch the financial markets every day, and monitor how the economy's status.
- You are more likely to have success if you invest in companies that cater to needs instead of wants.
- Keep your finances in control, and try to stay out of debt.
- Start with a short-term focus on investing, then work toward your long-term goals.
- Learn about investing tools, use them and enjoy better control.
When the Stock Market for Dummies says to invest in companies that meet needs and not wants, this means you will invest in companies that are less likely to close.
For example, a company that sells medical supplies is less likely to do poorly than a company that sells travel accessories. You are smart, so you can use your common sense to decide what is necessary and what is not.
The Stock Market for Dummies makes it easy for everyone to make smart investments. If you spend time researching, you can enjoy a profitable future.