When it comes to the question of what investments have the best return, with particular reference to investments in the shares trading portfolio, there is a very simple formula to employ in order to put yourself in the best possible scenario for maximum profitability.
Before the actual formula of picking stocks is explained, it must be said that every single thing on this earth involves risk, so nothing is foolproof or even full proof. Every thing has some element of risk to it, particularly the world of shares trading but, it is how you choose to minimize that risk which could set you apart from the crowd, possibly accounting for your resounding success.
You are probably familiar with the process of shares trading but, in case you are a complete novice, I am going to touch on the basics a bit, just to bring you up to speed with the technicalities behind shares trading so that you do not get confused when the formula is explained.
Shares trading is relatively simple and it is a popular way of making money these days (and losing money, it must be said). What you essentially do is sign up with an accredited shares trading broker, who can legally represent your trades, with whatever stock exchange the shares to be made available, will come from.
You then fund your shares trading account and make use of trading software to make your trades. If you think the stock price of Company X is going to up, you can buy a certain number of shares of that company, either from the company itself, or from a willing seller who thinks the share price is going to go down, or if they need the money for something else.
Say you bought 10 shares of Company X, at $50 per share. A certain time later (five hours, three weeks, two months, a year etc), each share now costs $55, which is an increase of $5 per share or 10%.
Since you bought 10 shares, you have now made earnings of $5 times 10 = $50. So, now your balance stands at $100.
If you make a bad call it obviously goes the other way and you lose money. You can buy different shares at different quantities, to consolidate on your risk or strategically buy with the aim of maximum profitability, which is ultimately why people go into shares trading as an investment route.
Now that you have a basic understanding of how shares trading works, I am going to get into a formula which you can use to pick shares, so as to have the best chance of making some good money.
In choosing shares to invest in, you will firstly want to choose them with a long-term view. Even if you are in it for a short time (as a trader instead of an investor), think about how that share might do over periods of up to five years.
Next, go for shares that are relatively low risk -- those that cater for basic human needs that will always be a part of life.
What do humans need -- humans need food (and water), shelter and possibly transportation. Picking stocks of companies that cater for these needs is a way to go and has proven to amass steady growth, so you might go for a health foods company, a construction company as well as a transport and telecommunications company.
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