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Choosing an Investment            By www.CandlestickForums.com
There are several criteria for choosing an              investment.       www.CandlestickForums.com
These criteria are that a stockinvestment should make money.   www.CandlestickForums.com
It should have a margin of safety so that   adverse events such as stock market crashes do no wipe out years of gains.    ...
Choosing an investment often has to do  with diversifying a stock portfolio inorder to broaden opportunity as well as     ...
Choosing an investment in a promising new stock, even penny stock investing,opens up the prospect of the occasional      “...
Choosing dividend stocks with historiesof solid, steady stock price appreciation is relying on the power of exponential   ...
An investment that grows at 14% ayear, for example, will double in value in               five years.       www.Candlestic...
With a secure investment, time is on  your side as dividend checks arrivequarterly and stock price increases year         ...
Investing in a company with a hundredyear history of always paying dividends       is not defensive investing.      www.Ca...
It is very commonly successful stock              investing.    www.CandlestickForums.com
Sometimes the best criteria whenchoosing an investment is whether ornot you will be able to sleep at night.     www.Candle...
Those who engage in long term investing will look for a margin of safety to help           protect against loss.       www...
However, they will also look for growthpotential. Ideally an investment will have  growth potential overlooked by the     ...
Thus the stock price will be lower thanwhat the company’s earnings potential           should warrant.      www.Candlestic...
This is an ideal example of the value offundamental analysis in stock picking.      www.CandlestickForums.com
Choosing an investment in a stock with a     low price to earnings ratio, forexample, will often mean that the price  will...
Stock portfolio diversification tends toreduce the risk of loss in stock market               investing.      www.Candlest...
By choosing stocks in different marketsectors the investor will reduce the riskof a market disaster in one sector taking  ...
In addition, by investing in a largernumber of promising stocks the investor   will increase his or her chances of       p...
For the average investor who has a fulltime “day job” it makes sense to hold up         to half a dozen stocks.      www.C...
For the full time professional a larger         number is possible.     www.CandlestickForums.com
This simply has to do with the ability to  do at least weekly fundamental andtechnical analysis of the stocks that one    ...
The Long term investor and the day trader need to buy, sell, or tradeinvestments that they understand.    www.CandlestickF...
If you don’t understand the investment don’t buy, don’t sell short, don’t’ touchit. This rule of thumb applies to technica...
Traders who do not recognize a pattern   in their Candlestick analysis should  choose to “sit this one out.” You can miss ...
As we said at the beginning, sometimes     best criteria when choosing aninvestment is whether or not you will be         ...
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Choosing an Investment

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http://www.candlestickforums.com/

Choosing an Investment

There are several criteria for choosing an investment. These criteria are that a stock investment should make money. It should have a margin of safety so that adverse events such as stock market crashes do no wipe out years of gains. Choosing an investment often has to do with diversifying a stock portfolio in order to broaden opportunity as well as to reduce investment risk. Choosing an investment in a promising new stock, even penny stock investing, opens up the prospect of the occasional “home run,” the stock market investment that multiplies a hundred fold or more in value in just a few years.

Choosing dividend stocks with histories of solid, steady stock price appreciation is relying on the power of exponential growth. An investment that grows at 14% a year, for example, will double in value in five years. With a secure investment, time is on your side as dividend checks arrive quarterly and stock price increases year after year. Investing in a company with a hundred year history of always paying dividends is not defensive investing. It is very commonly successful stock investing. Sometimes the best criteria when choosing an investment is whether or not you will be able to sleep at night.

Those who engage in long term investing will look for a margin of safety to help protect against loss. However, they will also look for growth potential. Ideally an investment will have growth potential overlooked by the stock market in general. Thus the stock price will be lower than what the company’s earnings potential should warrant. This is an ideal example of the value of fundamental analysis in stock picking. Choosing an investment in a stock with a low price to earnings ratio, for example, will often mean that the price will catch up to the earnings and the investor will profit.

Stock portfolio diversification tends to reduce the risk of loss in stock market investing. By choosing stocks in different market sectors the investor will reduce the risk of a market disaster in one sector taking down all stock values. In addition, by investing in a larger number of promising stocks the investor will increase his or her chances of picking a really big winner. For the average investor who has a full time “day job” it makes sense to hold up to half a dozen stocks. For the full time professional a larger number is possible. This simply has to do with the ability to do at least weekly fundamental and technical analysis of the stocks that one holds.

The Long term investor and the day trader need to buy, sell, or trade investments that they understand. If you don’t understand the investment don’t buy, don’t sell short, don’t’ touch it. This rule of thumb applies to technical analysis as well as the fundamentals. Traders who do not recognize a pattern in their Candlestick analysis should choose to “sit this one out.”

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Transcript of "Choosing an Investment"

  1. 1. Choosing an Investment By www.CandlestickForums.com
  2. 2. There are several criteria for choosing an investment. www.CandlestickForums.com
  3. 3. These criteria are that a stockinvestment should make money. www.CandlestickForums.com
  4. 4. It should have a margin of safety so that adverse events such as stock market crashes do no wipe out years of gains. www.CandlestickForums.com
  5. 5. Choosing an investment often has to do with diversifying a stock portfolio inorder to broaden opportunity as well as to reduce investment risk. www.CandlestickForums.com
  6. 6. Choosing an investment in a promising new stock, even penny stock investing,opens up the prospect of the occasional “home run,” the stock market investment that multiplies a hundredfold or more in value in just a few years. www.CandlestickForums.com
  7. 7. Choosing dividend stocks with historiesof solid, steady stock price appreciation is relying on the power of exponential growth. www.CandlestickForums.com
  8. 8. An investment that grows at 14% ayear, for example, will double in value in five years. www.CandlestickForums.com
  9. 9. With a secure investment, time is on your side as dividend checks arrivequarterly and stock price increases year after year. www.CandlestickForums.com
  10. 10. Investing in a company with a hundredyear history of always paying dividends is not defensive investing. www.CandlestickForums.com
  11. 11. It is very commonly successful stock investing. www.CandlestickForums.com
  12. 12. Sometimes the best criteria whenchoosing an investment is whether ornot you will be able to sleep at night. www.CandlestickForums.com
  13. 13. Those who engage in long term investing will look for a margin of safety to help protect against loss. www.CandlestickForums.com
  14. 14. However, they will also look for growthpotential. Ideally an investment will have growth potential overlooked by the stock market in general. www.CandlestickForums.com
  15. 15. Thus the stock price will be lower thanwhat the company’s earnings potential should warrant. www.CandlestickForums.com
  16. 16. This is an ideal example of the value offundamental analysis in stock picking. www.CandlestickForums.com
  17. 17. Choosing an investment in a stock with a low price to earnings ratio, forexample, will often mean that the price will catch up to the earnings and the investor will profit. www.CandlestickForums.com
  18. 18. Stock portfolio diversification tends toreduce the risk of loss in stock market investing. www.CandlestickForums.com
  19. 19. By choosing stocks in different marketsectors the investor will reduce the riskof a market disaster in one sector taking down all stock values. www.CandlestickForums.com
  20. 20. In addition, by investing in a largernumber of promising stocks the investor will increase his or her chances of picking a really big winner. www.CandlestickForums.com
  21. 21. For the average investor who has a fulltime “day job” it makes sense to hold up to half a dozen stocks. www.CandlestickForums.com
  22. 22. For the full time professional a larger number is possible. www.CandlestickForums.com
  23. 23. This simply has to do with the ability to do at least weekly fundamental andtechnical analysis of the stocks that one holds. www.CandlestickForums.com
  24. 24. The Long term investor and the day trader need to buy, sell, or tradeinvestments that they understand. www.CandlestickForums.com
  25. 25. If you don’t understand the investment don’t buy, don’t sell short, don’t’ touchit. This rule of thumb applies to technical analysis as well as the fundamentals. www.CandlestickForums.com
  26. 26. Traders who do not recognize a pattern in their Candlestick analysis should choose to “sit this one out.” You can miss opportunities but you don’t lose money by not trading or investing. www.CandlestickForums.com
  27. 27. As we said at the beginning, sometimes best criteria when choosing aninvestment is whether or not you will be able to sleep at night. www.CandlestickForums.com
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