Buying stocks is one of the more risky things you can do with your money. It is also one of the most lucrative.
Making money with stocks is not just a pipe dream. But, in order to succeed and keep your money safe there a few things that are important to know. Here is an excellent guide for beginners.
First of all, you need to know how stocks work. On a basic level, you are giving a company your money, which it then uses to try and grow. If the company grows, your investment will grow with it. If the company loses money, though, then your money will be lost together with it.
Many people make the mistake of looking to invest in a company that promises huge returns. This is how a significant portion of investors lose their money- by being too greedy. A company that is growing too fast is often not sustainable.
Thus, your investment will leap upward originally, but will most likely fall to spectacular lows soon after.
Your best bet in investing is to look for a solid, blue chip company with responsible managers that has shown a pattern of growth over a period of time. Such companies have a very good chance of continuing to grow in the future. Although there is obviously no guarantee that this will be so, it does give you the greatest odds.
Since such companies are considered low risk, you will probably not become rich off of such an investment. You will, however, be able to grow your money in a safe environment for a potentially long period of time. Here is a great guide to buying stocks online through some of the most popular broker.s
If your other options in investing are bank cds or something of the sort, you stand an excellent chance of making a lot more money by investing in a solid company.
What to look for in a company:
Firstly, look at the history of the company. Has it been steadily making money over the years? Does it have a history of rising stock value? These are generally indicative of a solid company.
Looking at the past, though, is only a partial picture. What you really want to know is what will happen in the future- will the stocks continue to grow?
So take a look at the present management- the CEO, the president, the company officers. If they have been with the company a long time and have a record of bringing in results, you can be sure this is a good bet. If any of the main executives are new people though, take a second look. Make sure you are dealing with people who will be responsible and not run the company into the ground.
The last thing to be sure of is the company’s future plans. They should have a growth plan in place for continuing their success.
If all of these factors are in place, then you know you are dealing with as safe an investment as you can hope to get. While there is no way to predict the future, sinking your money into a reputable, growth- oriented company is one of the best ways out there to really keep your money growing and to get long term results.