The primary conclusion that every person who is interested in choosing and buying profitable shares faces is the fact that different stocks differ greatly in terms of cost, reliability, and availability of regular dividend payments.
In this article, I will try to tell as much as possible about what methods exist and are used for selection, as well as the purchase of the most profitable shares.
At the beginning of activities aimed at the purchase of certain shares, special attention should be paid to the parameter of its capital.
If the start-up capital is a tangible amount, a good profit indicator can be achieved by focusing on the portfolio, which will consist of a large number of shares. It is on their number that you should pay attention, while not forgetting about the diversity of companies.
In the case of small capital, a numerical indicator will not be achieved, but you should definitely follow the principle of diversity. Despite the fact that there may be a situation when you have several single shares, each of which belongs to a new, separate company.
As a result, for most novice investors there is only one question: “How to choose the most profitable shares?” Which is an evolution and transition from a quantitative sphere to a qualitative one?
Methods for selecting the most profitable shares
One of the most effective ways to select potentially successful and profitable promotional assets are:
- search for stocks “on the streets”;
- choice, starting from the name;
- bet on those who have no competitors;
- purchase of shares of companies that produce popular products;
- surveillance of major market players;
- caution when choosing companies that are at their peak;
- rejection of the “second”;
- Termination of investing in shares of “illogical companies” or companies that work too much with one buyer.
Let’s talk more about each of the methods.
Search for stocks “on the streets”
It consists of investing in the securities of those companies that are engaged in something fundamentally new, innovative, with enormous advantages and prospects, but so far unknown in the broad market.
Such investments can pay off hundreds or even thousands of times. Excellent examples are Apple, Google, McDonald’s, Subaru and others. All of them brought to their initial investors, who believed in them at the very beginning of their journey, huge sums of money and continue to enrich them to this day.
Choice, starting from the name
There is a widespread belief that stock buyers should take a closer look at the “boring” names. This approach of the company to the choice of the name indicates that the main thing in its activities is not the presentation of a beautiful cover, but the quality of the assistance or goods provided.
Analytical data on companies with less catchy names indicate that their growth is more stable and rapid. Most investors will not pay attention to such companies at the initial stage of their development, and when they “force” to draw attention to themselves, it will be too late, because the price will rise by hundreds of percent.
Bid on those who have no competitors
Most of the companies that are present on the stock exchanges have one or another competitor that engage in similar or completely similar activities. For example, ” 21st Century Fox “.
This film studio is only one of the hundreds of world sites that are engaged in the same business. For her, there will always be a risk of being ousted from the market.
As for the various niche companies that are engaged in their own, to some extent monopolistic activity, they have a much more stable position. If you invest in a gravel pit, the risks will be less, and the profit is almost guaranteed.
Buying profitable shares of companies that produce popular products
All newcomers to the market should pay attention to the shares of companies that produce products with popular or similar popular services.
In most cases, these are manufacturers of medicines, beverages, various foods, razor blades, and other daily necessary industrial and food products.
Spying on major market players
Constant monitoring of the actions of large companies and well-known significant investment funds is the key to successful newbie trading. Regularly, company employees or entire organizations trade on exchanges and their solutions are not only professional but also thought out from the point of view of a long-term strategy.
Most of the purchases of large insiders are easy enough to track because various business publications constantly publish information about these activities. If, simply, simply, to copy their behavior on the sites, you can achieve good results in the long run.
Caution when choosing companies that are at their peak
Many analysts have repeatedly stated that it is necessary to be wary of shares owned by companies that are at the peak of their development. These enterprises, in most cases, have already reached the maximum point of their development and are unlikely to release something fundamentally new. This especially applies to companies producing food products.
However, the tech giants are different. There is always the possibility of the emergence of a fundamentally new technology that will allow a long-established brand to compete for more advantageous positions and increase its value.
Waiver of the “second”
For the successful selection of profitable shares, you should refuse to buy securities that belong to projects that advertise themselves, as the second McDonalds, Apple, Microsoft. The second will never be winners, they are always left behind.
Termination of investing in shares of “illogical companies” or companies that work too much with one buyer
Companies that periodically or even once allowed themselves to invest in unusual or unknown areas demonstrate their short-sighted or extremely unprofessional approach to the use of their assets.
Almost always, such use of personal funds leads to loss of capital, time and effort. And sometimes it even hurts the very thing that the investor did before. It is too risky to buy stocks of those who like to risk too much.
The same advice on refusing to buy shares concerns companies that are too focused on one buyer ( 20-50% of the total sales of products). In the event that their main source of profits refuses its product, the company runs the risk of even going broke.
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