Stock Trading- Winning Strategies pt 2
Submitted On 2008-07-30
Every investor like a seasoned fisherman must be abreast with sound foundational understanding of the undercurrent behavioral patterns of stocks investment. These winning strategies when fully understood can swell up your bank accounts beyond your wildest imagination.
8. If you are a short term investor ...That is an investor that trades for capital appreciation. Monitor closely the closure of registrar, because it will guide you as to when to sell. On the other hand, if you are a long term investor, thatís you are interested in capital appreciation, dividends and bonus payouts over the long term, then closure of registrar guides you to hold on to your shares and possibly buy more incase you donít have shares in identified companies. Donít buy a stock after closure of registrar.
9. Make it a habit of attending seminars on stock investment, buy materials such as manuals, audio and video cds, investment books, to enhance your knowledge about investing, investment newspapers such as Success Digest Extra, Stockwatch, Financial Standards, Moneywise, will be very helpful ultimately.
10. Know how to apply the principle of earnings per share. Because it shows you clearly under priced and overpriced stocks in the market. It is arrived at simply by dividing the profit after tax of a company by the outstanding number of shares. For instance if the P.A.T of Efetobor International Plc is $20,000,000 and the outstanding number of shares is 1,000,000. Formula therefore, will be $20,000,000 divide by 1,000,000 units of shares =20. Note EPS is calculated in tens.
11. Apply the principle of diversification, by spreading your investments into different sectors, and also mixing your portfolio with both penny stocks ... undervalued.., growth and blue chips stocks. Apply the principle of B.R.E. buying time, resting time and exit time to all your investments. Know when to buy, when to rest and when to sell.
12. Have a personal relationship with your stockbroker, appreciate him, buy gifts for him; this will endear you to his heart, because you need him to facilitate your trade.
13. Know how to apply the principle of Per Earning to Ratio. Because it shows you cheap or under priced stocks. It is arrived at by dividing the earning per share by the current price of a share. For instance the earning per share of Efetobor International Plc is 20 and the current price of its share is $60:00. Formula is 20 divide by $60:00 = 3 therefore, the P/E ratio is 3.
14. Apply the principle of quarterly and yearly reports. Your ability to read between the balance sheet and released audited financial reports of companies is very vital to reaping huge profits in the stock market. You will be able to know companies that have performed well on the basis of the details released. For instance profit before tax , profit after tax , earnings per share which determine dividends that shall be paid to share holders.
The performance of a company in these areas and other important areas that space will not permit me to attend to here is a pointer to the stocks you should pitch your tent with.
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John Efetobor is a Stock Analyst and Investor. Visit: http://stocktradingrevolution.blogspot.com
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