Investing money in stock is a risky choice but it is also fun to do. Some people recommend avoiding this choice because many investors lose money every year. After doing some researches, they do not understand how to know what stocks to buy. They also have a different view on how to win the competition. It is wrong but they should focus on the process, not the result (profit). The first thing you must do knows when to buy a stock and when to sell a stock.
How to Find Out What Stocks to buy: 3 Common Mistakes in Investment
Such as you read above, most investors misunderstand how to invest in a stock. They only pursue profit by thinking about the process. That makes them fall into the valley of loss but they do not know that it comes from their fault. So, it is important to understand how to find out what stocks to buy now. Before you get the information, you should avoid 3 common mistakes which often do by most investors:
1. They think that high stock cost deserves to hunt so that they are willing to pay it. Meanwhile, you should pay the price less than the long-term, per-share value of the underlying business.
2. Prioritizing the future profit potential is the reason why they want to pay high for the relative stock. Usually, it happens on the investors that growth-oriented that interest in big future earnings.
3. The investors never do research for some reasons such as do not have time and team to conduct.
The third point is the fatal mistake that many investors do. Even, does little research still result in losses especially not at all? You may start to apply a little research with essential points but after you often do research and expert. Without conducting results is also a risk of fraud or scammers. They often disguise as the potential companies that giving a lot of tricks, strategies, and some information.
On the other hand, the scammers use a pump and dump method usually offer a high stock price to buy. After many investors buy it, the scammer will sell all their stocks at a low cost. It turns out it is effective to make them fall into a big loss.
How to know what Stocks to buy and results in big Profit
Surely, avoiding those mistakes are not enough to know the best stocks to buy in October 2019. You should understand several essential things on how to find out what stocks to buy below:
• Invest in when they can do
Never risk your future and your finances to invest in stocks
. Although you like playing inside, they are also ready to fall you down. Therefore, you must have complete knowledge of the manufacturer (company). Understand the business field, original country to operate, and so on. This first way how to know what stocks to purchase is easy to do.
Nowadays, there is a search engine to open their website and read about them. All data exists inside such as the company’s annual report. On the other hand, you can check its recent presentations to investors or at industry trade shows. You might interest to use an analyst price target or the advice of the bulletin to research. Even though, do it alone is better where many ways are available for you.
• Always update when the time to buy and price to buy
After feeling ready to find stocks to buy
, you should search when people sell their stock. It turns out not all investors attract to watch the stocks at a low price. Some of them tend to avoid and afraid that it is one of the scammer’s actions. The best time to buy with cheap stock
price is in the period of time after historically crash or correction.
Additionally, you should think about the stock value to know whether likely to rise up to this estimated value. Establish a range at which you would purchase a stock, analyst reports, and the consensus price targets. It turns out you can have had trouble determining when to buy a stock without a price target range.
• Know when it becomes undervalue
Next, you must also know when the stock prices become undervalue. This step to know how to know what stocks to purchase is by estimating a company’s future prospects. If you find a stock price is below the value, it implies you are in a good time to purchase. Besides that, you can compare a stock’s price-to-earnings multiple to that of competitors.
• Should perceive P/E Ratio
Here, you also need to understand the name of the P/E ratio. P/ E or price/earnings ratio is the way to compare the current market price from the last four quarters to the cumulative revenue. You can also do it by comparing other similar companies to research. The stock price with a higher P/E than other similar manufacturers is the better reason to buy. Nevertheless, you cannot ignore the companies that grow fast although its P/E is low.
• Beta (talk on risk)
How to know what stocks to buy
is by understanding the beta. The task is to measure the volatility of your company’s stock over the last five years. If you do not know yet, the S&P 500 is the pillar of mental stability to call low and the contrary. High beta means high risk and in spite of this. Always supervise your high beta stocks because they have the potential to take your money. Meanwhile, the low beta stock is the potential to earn a lot of money.
Looking for dividend stock
is the right choice for people who do not have time to watch the market every day. It looks like interest in a savings account and you should look for a high dividend.
The ability to read a stock chart
is very important to have. It might take time to learn but you will need little time to learn the basic chart. For your information, the stocks that follow the charts have passed some research and resources which you might do not. Well, it is the last step on how to know what stocks to buy for October 2019.
Do not hurry to sell your stock and you should be patient to do according to some consideration above. It does not matter to hold the stocks for three to five years. Okay, those are 7 steps on how to know what stocks to buy. Happy trying and good luck!