There are 5 rules to choose good stocks for your investment portfolio

company strategy

First, the stock should have a strong and reliable background such as the history of company. The company which has a strong background and is well-known in the market has more clear information such as company strategy, company performance or company executives published to the market than the small companies so that the new investors can examine the company more clearly. From that reason, the investors will have more information for making decision to choose the stock to invest better than small company.

Second, the significant factor which boosts the growth of a company is its financial performance. The stock preffered for investment should not have a continuous loss of net profit for several years.

Moreover the loss should not appear while the other rivals in the same industry have profits and also the total performance of the industry is increasing in growth and profit. Some losses can appear in the case of the unexpected situations such as big floods, tsunami or political conflict or financial crisis as sub-prime but a good company should have strategies to reduce that negative effect and protect the company profit from that loss.

Moreover the more net profit the companies gain means the more chance to pay dividend to customers.view details from

Third is the transparency of management system in the company these factors are of more concern to the investors and social eyesight nowadays. The companies which do business with ethics will gain good image in the consumer eyesight and get the effect indirectly to their performance such as sale growth or market share. And also the companies which have transparency of management systems will demonstrate reliability in the customer and investor mind.

Next, the forth factor is the company executives. Since, human resource is the key factor of organization development and also performance, especially the top executives which have more power than others to determine the future of business. So a good history and high ability of executives are one of key factors of company growth and the investors should concern about.

company strategy

Finally, the fifth factor to choose the stock is the suitability to the purpose of your investment. If you would like to gain the dividends from your investment and would like to invest for middle or long term, you should choose the stocks which pay more dividends or have more dividend ratio and pay it constantly every year. But if you would like to trade daily and prefer more profit from capital gain, the target stock should be the stocks whose prices often change daily.

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