Mar 7, 2012

Posted by in Penny Stock | 0 Comments

Stock Investment Ideas That Work

investing-ideasStock investment ideas that work

There are a number of stock investment ideas out there. It is possible to make good money with a number of methods, and here is one of the best:

Value investing is one of the best stock investment ideas

Value investing is all about long term profits. The investor will not even buy a stock unless they are convinced it can keep making them money for months and years to come. Many investors either day trade, or look for short term investments they can cash in on in a matter of days or weeks. While value investing does take time and patience, the long term rewards are well worth it.

Why value stock investment ideas work

Short term, stocks tend to be affected by a lot of variables that have nothing to do with the company itself. However, long term they will reflect the company’s performance. Therefore, buying the stock of a profitable company and holding it for the long haul will ensure that eventually the stock prices to match the performance of the firm. Here are 3 tips to become profitable with it:

Avoid the news

Many investors make investing decisions based on the news, but this almost never works. The reason is that 1,000s of investors are seeing the same news. Therefore, by the time you purchase the stock, the price swing will have already occurred.

Make sure the stock is worth less than the company  

This is the core principle in all of value investing. The key is to figure out the company’s intrinsic value, and then determine the market capitalization. Assuming the latter is 70% or less of the former, it would be a good buy.

Focus on profitable companies

You should focus on firms that have been profitable for 10+ years, have low long term debt levels, and have a good future outlook. Ideally, you should know something about the market the company is in, so you can better assess their future potential.

Conclusion

There are many trading tips out there, but most of them do not work. Value investing is probably the best way to make money long term from the market. Use these value stock investment ideas, and you will start earning money shortly.

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