TIPS HOW TO INVEST IN STOCK?

•Always check Roth IRA. It will be beneficial to you in the long run because you will be able to save on your tax.

•When a company has competition, it can mean that competitors may drive the other company out of business. Or supply of similar stock of similar companies may be too large. In result, stocks are not going to have good value. Thus, not much demand will be created for such stock.

•Diversify the choice of companies you chose. It is generally not a very good idea to invest in and stick with one type of a company. Look for new companies even if you have never heard of them – learn about them, and read their financial information.

•If you are looking for a long-term good investment stock, consider well established brands. Among them are P&G, Coca-Cola, Google, 3M, etc.

•Monopolies are good if you find a good deal on their stock. It means that there is no competition, and the company is stable. Thus, its stock price and value are stable.

•A lot of businesses are seasonal. Travel industry, retail industry for example are not good choices because their income and revenue are not steady. It changes over time of the year and it is not a good idea to have an “unsure” stock. Such cyclical stocks have periods of strong growth and decline, so it is up to you to watch for that trend .

•If the company is shareholder oriented – you gain on your stock! If the company pays more attention to its CEO and Vice-Presidents, than the choice is not so good. These types of companies will choose to pay bonuses to its officials rather than pay out dividends.

•Profit margin is a good determinant when looking for a good investment stock. At least 10%-15% is a good choice.

•Don’t try to beat the stock market in the short run. It simply doesn’t work. You can beat the market in the long-run, thus invest in stable companies.

•Avoid brokers that closely follow S&P 500 or Dow. They do it to insure themselves against of market failure. Diversification is good, but it is also a “safe measure” for brokers to make money on you.

•Don’t get hung up online on stock market. It is always a good idea to learn how to trade options, futures, commodities, foreign currencies, preferred stock, or bonds. Learn about these markets and effects of one on the other. In many cases, currency markets can be good determinants for stock markets.

•When you buy stock, make sure you are confident in it. In case the stock value goes down – you should feel confident about it and only buy more of it. When you have good knowledge about the market and the company, your stock pick should be a good one!

•Make sure the business you are investing is profitable!

•The stock price is not a reflection of its actual value. Market value of a stock can be different from its actual value. It can be over priced, underpriced, or it can also be the same.