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When looking for good stocks to invest in sometimes it can be difficult to decide which stocks are really a good value and which ones just look like they are. No doubt it can be a challenge if you're a new investor who has limited funds to invest. If you're not sure where to put your money then here are my number one ideas to help you choose a winning security and not a loser!
Price Is Important!
Take into account the 52 weeks price range of the stock you want to purchase. This factor shows many important things. First it tells you how much fluctuation a security has. If you don't want a lot of risk then you should probably choose a dividend stock in a high profile company. They will most likely have low fluctuations in price. If you're looking for short term gains then you should buy a stock that is at the low end of its 52 week fluctuation. This tells me that the stock could potentially be depressed or undervalued and there may be an upside to take advantage of in the coming months. Alternatively, if a stock is too high on the 52 weeks side I'm wary of purchasing it as I don't want to get stuck on the down spiral and lose money.
Does Your Company Pay You Back?
A dividend is always nice. I love a stock that pays back its share holders. Many people are afraid this could effect the upside you'll get from growth but that's non-sense. Any good stock that pays a reliable dividend is not only sustainable, but that company is making money. If the dividend is too high then you should be wary as they may not be able to keep it up. Remember that a company can cut a dividend any time they want and are not required to keep paying it. You are also perfectly able to sell your shares and put your money elsewhere when that happens. Some companies have reliably paid and even raised their dividends every year for five, ten, or even twenty years in some cases! Look for these reliable dividend players!
Is Your Company Here To Stay?
When looking for a value investment company you're not looking for just anything that's cheap. You want a company with reliable books, a solid reputation, and a business ethic that will be around when you're ready to retire. How do you find a stock like this? Do your own research on that company. How they treat their customers is a good indication of how they do business. If they don't respect their customers they won't have any for their share holders either. I like to use forums, social media, and other online tools to gauge public opinion of a company before investing. This is not only important for gathering information, but also for seeing trends. If people think highly of a company then they will be worth more. The stock market is heavily influenced by optimism and fear.
Penny Likes to write about good stocks to invest in on here blog pennyseeds.com!
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