So you want to make money by investing in the stock market. Well, that is not an easy task especially in volatile times like those we’ve experienced recently. If you’re a newbie to investing you should know what you’re getting yourself into before you decide which stocks to buy.
Companies issue stock for sale when they are interested in either raising capital to fund expansion projects or want to be traded publicly. When you buy stock in a company, you are essentially purchasing ownership in the business. As a holder of stock (a shareholder) you have a claim to a part of the corporation’s assets and earnings. In the year’s the company generates a profit, the company can either choose to reinvest in the business or distribute earnings (or a portion of them) in the form of a dividend. Either way can be a benefit to the shareholder, buy receiving direct income from the dividend or the appreciation of the stock price which typically is a result of reinvestment in the business.
Finding Stocks to Buy
Looking at a company dividend payout history, fluctuation of the stock price, volume of shares traded are all considerations you should ponder as you choose which stocks to buy. However, as part of this consideration you should look into the financial health of the business. Since you’re going to be buying an ownership stake in the business, it behooves you validate that it is a promising and financially stable business. Conduct Fundamental Analysis to help you evaluate the intrinsic value of a stock by examining related economic, financial and other qualitative and quantitative factors. Take a look at the sources of the company’s cash flow, its sustainability, and the company’s overall financial track record over the last few years to get an idea of its financial future.
Above all, you should stay on top of the latest news and trends in the stock market. Frequently, the best stocks can be predicted by industry experts who have observed and studied the stock market for some time; sources that feature up-to-date news on the best stocks can function as your guide in finding promising stocks to invest in. InvestorPlace offers a look at the latest trends in stocks, as well as expert perspectives on current trends. Avoid missing out on an opportunity with the best stocks by taking a look at the “Stocks to Buy” section of our website today!