Candlestick Trading Blog
|To Buy or Not to Buy – Stock Buying Tips
For new investors who are not sure how to get started, choosing a company from which to buy its stock can be intimidating. After implementing a stock trading plan, a new investor needs consider several points before stock buying tips can help with his or her buys. Market cap can help successful traders compare companies relative to each other. If two companies have the same market cap, but one has a higher profit, it becomes a good stock buying tip to look at the one that is more profitable. A related metric that can be beneficial is price to earnings ratio; it can also provide a valuable, alternative measurement of related companies.
Is the company rebuying shares?
This is an important stock buying tip because it relates to per share growth and not overall corporate growth. If a company reduces its number of outstanding shares but has the same profit, sales and revenue, it is still more profitable since the return is based on fewer shares. Strong money management is an indicator of a solid company. An example of this situation would be two pies of the same size, one with four pieces and the other with six. Even though the pies are the same size, each piece of the pie with four pieces represents a larger share of the total than the one with six pieces.
Such a situation would serve as a stock buying tip for the management team of any given company. A shareholder would prefer that the company reduce the number of outstanding shares in the stock market as opposed to using capital in less profitable ways.
What is the motive for investing in a company?
This is a stock buying tip that every investor needs to remember. If your decision to buy into a company is based on anything but solid stock technical analysis, you are looking for problems! An affinity for a particular company or product doesn’t guarantee the success of the company or its stocks. Only a fundamentally sound, fiscally strong company will be profitable.
Are you willing to make this stock a long term investment?
For a stock that will become part of portfolio diversification, if you aren’t committed to hold on to the shares for long term investing, the best investment advice is not to buy them. For those not involved in day trading or buying and selling puts, the best tip for stock buying is a long term position of researching companies, finding low priced stocks, collecting dividends and reinvesting them. Long term investing requires more patience and diligence, but it also allows the investor time to perform fundamental and technical analysis and chart results more thoroughly using a stock trading system such as Japanese Candlesticks. Using stock investing concepts such as these can be your best investment, providing you with stock buying tips based on hundreds of years of proven success. In the world of the stock market, success provides the ultimate stock buying tips available!
Online Stock Market Reviews presented live via the internet by Stephen Bigalow