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How to Pick Stocks For Beginner Investors

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StrategyDriven Practices for Professionals Article |How to pick stocks|How to Pick Stocks For Beginner InvestorsYou have been saving for a long period of time and you decided to try out stock investing but you just know some basics about stock trading. The first step before picking a stock to invest in is research.

Researching a company to understand its business operations is a good start. This is critical because if you do not know how a company generates money, it is difficult to track the performance of your investment.

There are a number of questions to answer before you put faith in a company and here are three of them:

Do the company’s profits generally grow over time?

If the answer is yes, then this is a good sign that the company is doing something right. Companies that show positive earnings growth tend to have financial and operational stability. You should regularly check the company’s financials to examine whether the growth in revenue and earnings are positive or negative.

It’s a challenge to look for very specific data, interpret it, and then come to a conclusion. Imagine yourself trying to deal with financial reports, digging out for more information, trying to find trustworthy and accurate sources, and deciding if the data is valid or not.


What is the company’s relative strength in its peer group?

When investing, the industry a company operates in can be a crucial screener. The initial point to start would be to look at how an industry is represented in the market and what growth potential is likely in that space.

What is its share in the market? Is there a competitive advantage that allows to company to stand out?

To make a fair comparison, list up the players (competitors) of the same size (market capitalization) and compare their profitability and stock performances over a period to figure out how they stack up next to each other.

Price-Earnings (P/E) Ratio

P/E is the ratio of valuing a company that measures its current market capitalization relative to its trailing earnings. In short, this valuation metric shows how well a price of a stock reflects the earnings of the company.

When conducting fundamental analysis and value investment strategies, the P/ E ratio is one of the metrics that show whether a stock is overvalued or undervalued by the market. The rate is a key indicator to compare companies in the same industry. A company with a lower P/E ratio is not valued as highly as one with a higher P/E ratio in the market. As a conscious investor, it is your task to determine whether the stock deserves a lower valuation or whether the market is undervaluing it- which could make it a good stock pick.

Conclusion

Whether you are a beginner or a senior in stock investment and company research, EquityRT Financial Market Analysis and Research platform addresses the need for information and analysis that investors seek for.

Money, Money, Money: Why getting into trading could be the best thing you’ve ever done

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StrategyDriven Entrepreneurship Article
 
Everyone wants to work hard and try their absolute best to acquire the most wonderful life they can possibly have, getting to have the brilliant experiences life has to offer, such as seeing the world, living in a beautiful home, and dining out at swanky restaurants every weekend. This is a goal most people can agree they would love to have for themselves and you, surely, are no different. When you are determined to make something of yourself, you will know that being financially secure is the first step towards the life of your dreams, but the security of your money is not enough; you want to flourish. One way of doing this is to investigate getting into trading. Trading is a lucrative way of making money quickly and easily if you know what you are doing. In this guide, you will learn some vital information and steps to getting into the business of trading and making the money you need to achieve the lifestyle you have always wanted through financial freedom.
What is trading?

Before you start to think about getting into trading seriously, you will need to be one hundred percent clear on what it entails. Being a trader means you buy and sell instruments of finance, such as stocks, bonds, and shares for a monetary gain. It is something that is largely done by big corporations but, with some seed money, you can begin to trade as an individual and start making money for yourself. Read more

8 Myths About Trading Debunked

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The world of trading can be challenging and confusing, but it also offers you the opportunity to make a lot of money and diversify your investment portfolio so that you can remain financially secure as you get older. But there are some myths about trading that should be debunked, whether you are already involved in trading or you are thinking about getting into it. Keep reading to learn more so you can have a better understanding of what trading is all about.

1. Online Trading Is Not Safe

One of the myths that you may have heard about online trading is that it is not safe and secure. But the truth is that it can actually be totally safe and secure, and it can put you in the driver’s seat of your trades, rather than relying upon a broker, if that is what you desire. With high quality trading platforms like Stern Options, you have a lot of choices that will make getting into the world of trading easier, and you can also keep making money from your trades by doing it all online and from wherever you are located.

2. To Trade Options, You Need to Invest a Lot

When it comes to trading options, many people think that you need to have a lot of money to get started. But the truth is that you really do not need that much money. Every trader has to begin somewhere, and you often only need a few thousand dollars to get started. You can use this small investment to access the market and then reinvest any profits that you make so that you can keep watching your money grow over time. Besides, when you are first starting out and learning the ropes, you do not want to invest a huge chunk of money that you could risk losing.

3. To Trade Stocks, You Need to Be Rich

Too many people think that trading stocks also requires a lot of money, and that the stock market is sort of like a club that only rich people can get into. But with online trading making it easier than ever to research stocks and invest in them whenever you want, this myth is easily debunked.

4. A Popular Company Is Going to Have Great Stocks

When people first enter the stock market to start trading shares, they might assume that the most popular brands are going to be the most successful on the market. But this is not true. Just because you read news about a particular organization doing very well does not mean that you should invest in their stock right away. Instead, it is always wise to conduct a complete analysis prior to investing. You want to look into the company’s financials so that you can see just how sound the brand really is, and so that you can determine if the trend of growth will continue. And you also want to look at the valuation so that you can determine if the stock is valued expensively, cheaply, or fairly.

5. You Should Not Risk More Than 2% Per Trade

A lot of people are also under the impression that you should not invest more than 2% on a trade. This piece of advice is meant to help you avoid spending too much and ruining your entire account. However, the truth is that you should consider a few factors before deciding upon how much you will invest per trade. This includes the trading timeframe, your own tolerance for risk, and the system’s performance.

6. Complex Strategies Are Better Than Simple Ones

Depending upon whom you talk to, you might hear that a complex trading strategy is better than a simple trading strategy, or vice versa. The truth is that there is no one solution to trading. Some individuals are able to make a lot of money by following some pretty complex trading strategies, while offers are able to keep things simple and still make a great return on their investment. Basically, every trader will trade a bit differently than the next trader, and what works for you may not work for someone else, so it is up to you to test the market and try out different strategies until you find the ones that work best for you.

7. Trading Stocks Is Like Gambling

There are many people who, unfortunately, will view trading stocks on the market as the equivalent of gambling at the casino. This is simply not true. When you invest in stocks, you will need to do a good amount of research if you want your assets to grow. The right amount of research and diversification of your investment portfolio will help you minimize your risks and ensure your money will grow. The same can’t be said for gambling, for which there is little rhyme or reason. Besides, when you invest in stocks, you are investing in companies and you are following their profits and losses.

8. Stocks Inevitably Fall

Yet another common myth in the world of stock trading involves this idea that every stock, no matter how high it goes, must eventually come back down. But that does not always happen. If you are able to find a really successful business that has great managers and long-term success, you can ride that wave, and you will not need to worry about the stock price falling. Of course, there will be fluctuations no matter what, but there is no rule that says a stock price has to go back down to its starting point or below that starting point. You can invest and watch your money grow over time, even if you do hit a few days during which the price drops a bit before it recovers.

Now that you have a clearer understanding of some of the most common myths about trading, you can enter the market and start trading in a way that will ensure your money will grow. Remember, stocks go up and stocks go down, so you will hit some losses every now and then. The key is to stick it out and then sell high after buying low.