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How to choose stocks for long term investment

Tech Stocks22

Tech Stocks22

Any trader who decides to withdraw from intraday best online trading stocks is confronted with the question: what criteria should be used to select the stocks market for long-term investments and what should be paid first-hand attention. In this case, the trader should start with the simplest thing – first look at those indexes that appear on the network and are available to every investor who does not want to go into details. You can read more about investments in the articles Long term investing and How to use the economic calendar.

Here is an example company overview from a website

Issuer’s earnings, earnings per share (on an annualized basis), dividend yield, i.e., what we see is the basic information about the company: issuer’s income, earnings per share (on an annualized basis), dividend yield. Before embarking on long-term investments, it is important to determine the type of income that you plan to receive from your investments, which can be divided into three groups.

Dividend stocks yield

The simplest type of analysis is the search for stocks market with good dividend yield, which is reflected even in the company’s review, i.e., No need to delve into the financial information of the company. Having embarked on this path, the investor can already calculate the possible profit, bearing in mind the previous data on the payment of dividends, and choose a company that satisfies them. There is a risk that the shares of the selected issuer will fall in price. Still, in the case of long-term investment companies that receive good dividends, they are financially stable. In the worst case, their shares are traded in a range, or the shares fall in price along with a decrease in stock indices, i.e., almost all stocks market trading on the market will become cheaper. Using this tactic, you can wait until difficult times in the market pass, while your deposit grows every year; and if the how to choose stocks grows in price, you would have additional income, which can several times exceed the amount of your investment.

Risk or income

A stock portfolio can be anything: experiments prove that a random portfolio is even more profitable than the one made by experts. But to keep all the savings in the stocks market is crazy: usually, they combine different financial products.

You cannot keep shares and bonds in a ratio of 50 to 50 because the stocks market is too risky a tool, no more than 20% of the capital trusts it.

If you have a small amount (up to 300 thousand rubles), then invest in each asset in turn. For example, send the first 10% of planned capital in short bonds. 

Long-Term Equity Investments – Best Portfolio

The best portfolio will be that which suits your interests and needs. Of course, if you buy gold, stocks exchange, and bonds in equal proportions, you will not be disappointed with income, but you are unlikely to receive moral satisfaction.

Here are some questions to ask yourself

In what currency do I need income?

Is there a chance of early withdrawal of funds?

How much time am I willing to devote to my portfolio?

Am I interested in developing my financial literacy?

What industries do I know best?

What industries would I like to understand?

Ideally, it would help if you chose a portfolio that covers inflation, does not require extra time or nerves, and also includes companies from industries you understand. A long-term portfolio is even obliged to satisfy all these requirements; otherwise, you risk falling apart, withdrawing money, and forget about all the care with investing.

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