When you’re learning how to invest money, it’s wise to learn from the masters. These tips learned from professional money managers will help you get started on your way to investing for retirement and profit.
Things You’ll Need:
Pen, pencil, paper
Think of Boring Stocks. When you’re first thinking up companies to research for potential stock purchases, think dull. Think about what you use every day – tape, staples, computers, shoes, printer cartridges, paper, and dishes. What companies make these items? You can start your research there.
Write Down Your Ideas: When you’re trying to think of companies to research, consider those not widely exposed to the population that have a product (shoes, tacos, computers) you think is excellent. You might find a good company with a lot of room for profitable growth.
Research Your Choices: You can find numerous places on the internet to research a company’s debt, etc. Yahoo offers such services. Look at the links listed below to find good places to learn more and research.
Check the Company’s Debt and Earnings. Make sure the company operates with low debt and that they have consistently increasing revenue from quarter to quarter. If they have high debt, trouble can happen when times get tough.
Continue Learning. Learning how to invest your money is a process. Read books by Peter Lynch, Ric Edelman, and Warren Buffet. The books are better than magazines because, in books, you can learn a process from successful money managers.
TIPS & WARNINGS
Never invest in any idea you can’t illustrate with a crayon,” said Peter Lynch, who managed the Fidelity Magellan Fund for 13 successful years. In other words, you should easily be able to explain what the company does.
Don’t buy a stock because it’s cheap. Buy a stock you have researched and know a lot about.
Don’t let yourself follow “hot tips” blindly. Stick to completing your research.