What should I consider when buying shares?
Purchase of shares is a means of investing in companies in which you want to own your own capital. These ownership positions are issued in instruments called shares. People buy stocks through brokers, agents, companies themselves or can be traded individually.
It is important to consider not only the company you want to invest in, but also the stock market environment at that time. For example, if the market is in a long -term decline or recession, you would like to explore companies that create life needs. Some items of household or consumer goods are more reliable during this time. They will always be needed, regardless of the economic environment.
On the other hand, if markets grow and positive, growth shares may be considered. It is a time when people are interested in expanding their horizons with new technologies and ideas. As a result, these shares with a higher risk will be better off when the market on average AOPET CANCE.
An important indicator for the stockThe market is a gross domestic product (GDP). This is the value of all goods and services produced in the United States. This is no matter who actually owns the resources used. The percentage change in GDP after the modification of inflation is considered an important indicator of the state of the economy. The higher the number, the faster the economy grows.
Another aspect of buying shares is dividends and their revenues. This important indicator is the percentage of return on currently realized. It is calculated by dividend divide by the price of shares. The higher the stock price, the lower the yield.
Most shares that pay dividends are more stable and may not increase as fast as growth shares. However, the cash dividend increases the value of the stock. TheSdatendy E can be taken as cash or can be automatically reinvested in multiple shares. Tools are a good example of stable stocks that pay good dividend.
Price/earnings ratio (P/E) is an important indicator of stock purchase. The division of the shares price by annual profit at the share is easily reached. If the company has a $ 1 profit of $ 1 (USD) and shares are sold for $ 20, then P/E would be 20.
Another common indicator that needs to be considered when purchasing shares is the price ratio to the book. This measuring wand compares the stock price with accounting value. This can be derived when taking over total assets, minus liabilities, divided by the number of unpaid shares.
Many companies and brokerage programs offer automatic investment plans where shares will be purchased at a certain date regardless of the price at that time. This allows the averaging of the dollar cost, so your total purchase cenabude is more balanced. Experts often recommend the timing of the market in this way.
One of the most important things you don't want to do is tied to a specific supply. Many people fall in love with a particular businessSti and wants to own it regardless of circumstances and reports. Something else to avoid is "hot tips". This form of investment is dangerous and needs to be avoided. If you hear some benefits when purchasing shares of a particular company, you should personally explore it and decide. Likewise, if you see the risks arising from specific actions or sector, it should be monitored.
It is important to diversify when purchasing shares or investing in general. Depending on the tolerance of your age and risk, you should have a percentage of your portfolio in stocks, bonds and cash. Stock purchases can be diversified between growth and blue shares. Many people decide to diversify between consumer goods, non -cyclic, technology and tools.
Whenever you buy shares, you should invest in the company for a long time. Purchase and holding strategy always works best. Pursuing inventory, emotionally purchasing and selling is only beneficial for brokeragehouses. They earn a commission regardless of whether you are buying, selling, earning or losing money. Simply realize products and services available on the market and monitor what consistently prevails is usually a good way to choose shares for purchase. You should review your positions regularly and ask yourself if you would still buy supplies.