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.