Best Stocks To Invest In
The best stocks to invest in are those that are going to mature in value. Really that's an obvious, fundamental and inarguable statement. There is of course another factor that needs to be taken into consideration and that's the potential for income from a stock holding. To some investors, especially older persons who've retired, the prospects for income are probably more important than the potential for capital growth. It may well be that income from shares is a retiree's main source of income and, as he or she gets older, any capital appreciation takes on less significance. There's a style of phrase that's often used about investment propositions - "past performance is not necessarily a guide to future performance". Unfortunately, an investor has little else to help his decision making in this area. If a company has consistently paid good dividends and there have been no major changes in either its senior management or external issues to affect it, then it's likely that it'll continue to pay good dividends. When it comes to looking at stock from an appreciation point of view, there's much more to take into account. Investing in the stock market has been described as "trying to out-anticipate the professional anticipators". The objective is to buy when prices are low and sell when they're high but it's knowing when those peaks and troughs have been reached that's the hard part. These days professional portfolio managers use computer models to work out when the peaks and troughs are going to occur but they're far from fool-proof. Some investment companies - banks and insurance companies - buy and sell automatically. When a stock loses a predetermined percentage of its price, the in-house computer will automatically connect to NASDAQ and sell. Similarly, the program will hold stock values in an index and if a price reaches that value, again NASDAQ will be contacted automatically and a purchase made. Sometimes these automated systems can be their own downfall. It's a generally accepted belief that the stock market falls of 1987 and 2002 were exacerbated by automated selling. It all happened so quickly that, by the time the human managers realised what was going on, it was too late and the damage had been done. Which ever is the more important criteria, the independent investor must be wary. Research and planning are keys to successful stock trading as they are in any field of human activity. Many people say that nobody should put money into stocks that they can't afford to lose - if only it were that simple. A potential investment then needs to be researched. The track record of its management should be checked out and its several most recent reports scrutinized. The CEO's most recent utterings need to be investigated and his plans and ambitions taken into account. The general trends for the economy as a whole need to be looked into and the trends in the industry or commercial activity the business is involved in must be examined. If all then looks in good order, if the trends look to be upward, it'll probably be safe to make the investment. Alternatively, don't do any of that, consult a rofessional adviser or stick a pin into the Dow Jones list in the Wall Street Journal.