Buying stocks is an easy thing. Of course, it is harder to pick good stocks. Every person, that has some capital, can open a trading platform and buy stocks, but the goal is not only to buy the stocks but to make profits from stocks. And even if profits are made, that doesn’t necessarily mean that stocks were well selected because if all the market was increasing strongly, then all the stocks might have been profitable.
There are many types of stocks and some of them are more volatile, some less and if true results to be measured, and then similar stocks must be compared. Many criteria may be used for buying proper stocks but the most helpful can be valuation multiples and full analysis of a company and its financial results.
When buying stocks it is very important that those stocks would meet investment strategy of a particular investor. That means stocks should not exceed investor’s risk tolerance, and asset allocation must be chosen properly.
Investment psychology gains momentum in contemporary business world
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