The stock market is a very volatile market and making money through stocks is not only difficult but also less probable at times especially during the times of financial crisis.
The following are some of the qualities a person should possess before investing in stock markets.
Some of them are mandatory while some of them are more preferable.
1.
The investor should be having some basic knowledge about the stock market.
2.
He must have some money to invest in the stock market.
3.
He must have got himself an account with the stock broker.
4.
He must have some good analytical qualities and interest in past stock activities to decide his future course of action.
5.
He must be patient and not be expecting to make money right away.
He must understand that it takes time to realise good money in a stock market.
6.
He must be looking at the money earned in a stock market as an additional income and not as basic money.
The following are some of the qualities in a stock or a company before making the investment decision: 1.
The company that you are investing in must be a good and healthy company and must have been experiencing a steady growth in its stock value over a period of time.
2.
The company must have a good dividend sharing pattern and must be sharing dividends with its investors on a regular basis.
3.
If it is a recession or a financial turmoil in the market, then it is advisable and recommended that you buy a stock of the company which is at the bottom of the ladder, whose stock values are at an all time lowest.
Because these stocks are the ones which have no option but to go up in the future and if that happens then lot of people would start buying those stocks again resulting in profits for you.
4.
People who are looking at making marginal profits within a short period of time must invest in consumer durable companies or FMCG companies whose prices are fluctuating almost on a daily basis.
5.
Invest in companies which are planning to make acquisitions or mergers in the future.
Such business activities would directly affect the shares of the company.
6.
Those investors who are looking at long term investments or invest more in the company rather than the stock of the company should think of investing in manufacturing companies like cement, steel, automobiles, etc.
7.
It is advisable, before making a decision to invest, a thorough analysis and research of the companies business model, its sustainability, growth and position in the market, its cash flows and the managers who are managing the company.
The management is one of the most important factors because they are the ones who are responsible for the appreciation or depreciation of the stocks.
The above were some of the steps that should be taken into consideration before zeroing in on a stock of a company.
It would be better if you could take some expert advice rather than taking those decisions all by yourself for investing.