I Spy with My Little Eye, Stocks to Buy
Is There Ever a Good Investment?
There is no miracle formula or super pill that will make you know the ins and outs of the stock market, but there are precautions and measures you can take to assure you and allow yourself to feel confident in your investment choices. Last thing you want to do is invest a good chunk of your hard earned money into a flop and lose it all.
So to tell you right off the bat: no, there is no 'good' investment. They all come with risk. No matter how strong you think it is, there is always a way for that stock to crash or for the market to crumble.
But here are some things to consider when thinking to invest. Always ask these questions before diving into a company.
1. Do you hear a lot of buzz around them? For the most part, this would be good. This means that people know about the company and it could benefit them in a big way.
2. Are they selling a lot or are their stores always packed? If you see long lines every time you visit, that is a sure sign of a good investment.
3. Did they land a good contract? Government or private, contracts means stability for the current time frame. Make sure they keep locking them down or finding new ones.
4. Is the industry going to be huge? All those that wished they'd invested in google and yahoo back in the day know this one. They failed to see how powerful the tech market was going to be and missed out.
5. Does your company solve a problem? Do you have a drug company that has a patent for the cure for diabetes? Or maybe the first driver-less car? If your company owns the market, that could be easy initial investments (pump and dumps). Just make sure they hold their grounds once competitors jump in, or else it's time to sell.
6. If you could ever visit a company, see how they look. If you visit a startup, see where they spend their money. If the place looks great with golf walls and mahogany desks, then it may be wise to reevaluate your choice. If they look like appearance is the last thing on their mind and the R&D department is huge, that may be one to keep an eye on. Always match up these aspects with their cash flow.
7. Are stores popping up everywhere? If so, another sign of growth and more overall sales.
8. This question may be the best of them all. Does the company do good for the world? If you find a company with good morals and strong direction, those are solid qualities to see in a growing company. People will spend a premium on a product, knowing that it's for good. I mean take a look at Tom's shoes for example. Not the best looking ones, but people love them for what they stand for.
Make a Judgement and Think Big
Take some of these insights and put them to work. Think of companies you enjoy and ask why do you enjoy them. Why are they successful and will they be successful 20 years from now.
It's not too difficult to imagine these traits, but you got to be able to foresee the market and the company's direction a little to make the best bets on what stocks to invest in. Go on and grow your portfolio.
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