Many greenhorns belt on the notion that acing the stock trading means buying low and selling high BUT that’s not without a calculated risk. Want to know the strategy?
RE: Key To Thrive The Stock Market
Dear Share Buyers,
How to Make Money In the Stock Market Fast 2012
Let’s just accept that Warren Buffet’s golden rule of “Buy wonderful companies at wonderful prices and hold them forever” shall prevail but what encompass wonderful prices?
Know The Stock Market Behavior
You probably know that a good buy carries low P/E, which means reasonable/reduced PRICE with high EARNING. So while you won’t go wrong with buying undervalued companies which tends to carry the same characteristic, your outcome differs depending on the financial health of the prospective company.
Whereas sector rotation following institutional investors making seasonal industrial investment shifts results in price decline and sporadic supply-demand upset due to offering surge to dilute and reduce prices temporarily, note that it’s completely different from taking chances with stocks that decline due to unoptimistic financial status in hope for a rebound. Hence, in order to determine if their P/E is low for good reasons, this is when you need to do your homework.
Know Your Stock Inside Out
Always understand that knowing how to make money in the stock market fast doesn’t mean you don’t have to contribute time and energy. You only work hard once, pinpoint the “wonderful company” and wait for the “wonderful price” to come.
And in the mean time of waiting for the right time and opportunity to meet, get a solid grip on the company’s numbers you’re interested in. At the end of the day, you only want companies with fittest management teams who can lead to future growth, keeping debts to minimal, securing positive earning trends and good cash flow. You can get all these answer from Annual Reports to gauge financial ratios from Balance Sheet and Income Statement as well as SEC’s 10K and 10Q reports to dig up more helpful insights.
For that small legwork in the beginning, you’ll smile at the passive income in the long run when you aimed right.