Wednesday, 27 October 2010

Investing in Stocks, Invest in quality businesses only

If you wish to invest in stock, what would you do? Normally you may follow what others do. But in case of investing in stock you should not follow others blindly. IF you do so the result may be a heavy loss. Then main thing you must be aware in stock trading is that it is not stock, but the business makes the growth. If the business do well the stock also do well. If the business of a particular company is dull the stock of that company also will be dull. So analyze the business before investing in their stocks.

The brand names and popularity may not lead to profit for the shares of such companies. In case of IPOs the brand name and trade mark of the company may overvalued the IPO and the investors will invest more money in the same and after listing, the performance of the shares may come down normally, if there is no a good support by the performance of the business.

The famous investment guru Warren Buffett says that “an investor needs to buy the stock as if he is buying the whole company down the road”. When you buy a company you will study all aspects of the company like the product of the company, consistency of the sale of product, whether the company is able to change according to the changing taste of the consumer, the competitors of the company and the specialty of the company apart from competitors, risk factors of the company etc. When you wish to purchase a few shares of a company you must be careful as if you are going to buy the company.

If you are vigilant when buying shares, you must not be worry when you sell the shares of that company. No doubt you will get a definite profit.

Let us conclude by remembering another quote of Warren Buffett “If a business does well, the stock eventually follows.-  So follow only good and stable stocks of stable companies. The success also follows you.

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4 comments :

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  3. Hey :) Is it OK that I go a bit off topic? I am trying to read the post on my new Mac but it doesn't show properly, do you have any solutions? Should I try to find an fix for my browser or something? Thanks for the help I hope! Tana x :)

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