How to make Money on Stock
How to make Money on Stock
We are delving straight right in to it, we will show you what stock to buy to make real money.
1.You can make money by investing in growth stock –
The basic idea behind a growth stock is that you want to buy it when it’s not worth much and then sell it when it’s worth a lot (“buy low, sell high”)
A growth stock investment strategy attempts to find companies that are already experiencing high growth and are expected to continue to do so into the foreseeable future.
To investors eager to capitalize on this momentum, rapid growth means a fast and sustained increase in the stock price, which leads to a faster accumulation of wealth.
2.A safer way to make money on stocks is to invest in a company that pays dividends, but the real advantages of these stocks are their stability and dividends. You can probably trust that McDonald’s, Dangote, Microsoft, MTN, isn’t going to go out of business any time soon. Since the company makes enough money to reinvest and still have some leftover, it pays dividends.
In other words, the company pays you money for being an investor. Long-term investors have seen a good return, but if your goal was to make a quick buck—or if you couldn’t stomach that big dip—If you can’t handle the thought of a volatile stock price, don’t invest in growth companies.
3.Cheap isn’t always good, and expensive isn’t always bad. Sometimes a stock is cheap because its business is growing less or actually slowing down. And sometimes a stock is expensive because it’s widely expected to grow its earnings rapidly in the next few years. You want to buy stocks that you can reasonably expect will be worth more later, so look at value combined with expectations for future earnings.
4.Evaluate financial health by digging into the company’s financial reports. All public companies have to release quarterly and annual reports. Check the Investor Relations section of their web site, or find official reports filed with the SEC online here. Don’t just focus on the most recent report: What you’re really looking for is a consistent history of profitability and financial health, not just one good quarter.
5.Know how much debt the company has by check the company’s balance sheet. Generally speaking, the share price of a company with more debt is likely to be more volatile because more of the company’s income has to go to interest and debt payments. Compare a company to its peers to see if it’s borrowing an unusual amount of money for its industry and size.
6.Find the ETFs which track the performance of the industry you interested in and check out their holdings. This can be as easy as just searching for “Industry X ETF”; the official ETF page will disclose either all or only the top holdings of the fund.
7.Use a screener to filter stocks based on specific criteria such as sector and industry. Screeners offer users additional features such as sorting companies based on market cap, dividend yield and other useful investment metrics.