Have you been thinking of trying our hands in the share market lately? Well, even though it is a good option, before any advances in the stock market industry, it is very important to gain knowledge on how to invest in stocks intelligently and confidently. The internet is a great way to learn all this and read HQBroker Reviews as well. Below are some tips on investing in the stock market for dummies.

Some Points To Ponder On

  • Investment is not being done on the stock but rather on the company.
  • The reason for investment is that the company is in profit.
  • When the company is not making a profit- then it is not called investing but rather speculating.
  • Stocks should not be ever 100% of a person’s assets.
  • Stocks’ price depends on its company, and the condition of the company depends on its industry, customer base, general economy etc.
  • Logic and common sense are very important in this industry.
  • The person should have good reasonable reasons for investing in stocks.
  • Monitoring the stocks is important.
  • Researching on the brokers is essential.

Checking The Company

After following the above basic steps, the next step is to check the important fundamentals of the company before investment like:

  • Earning- A company having earnings 10% higher than its previous year earnings is ideal.
  • Debt- A Company should not have more debt than it had the previous year.
  • Sales- The Company should have a higher number of sales than the year before.
  • Equity- This should also be higher than the previous year.

Financial Measures To Look Out For

  • P/E or price to earnings ratio- The ratio should be less than 20 for large stocks and should not cross 40 for small-cap stocks.
  • Price to sales- It should be near to 1.
  • Earnings growth- It should be higher than the previous year, at least 10%.
  • Debt- Debt should be less than assets.

Other measures beginners can take watch HQBroker Video Reviews for more information about the correct brokers and the stock industry.