TO BE SUCCESSFUL IN THE MARKET, YOU NEED TO FIRST FAMILIARIZE YOURSELF WITH ITS CAPABILITIES
Warren Buffett, Bill Ackman, George Soros, Carl Icahn are just some of the list of famous investors who have made their billions in the stock market.
According to statistics, success is achieved not by those who successfully trade stocks at the moment, but by those who have a clear strategy and show stable results from investments over a long period of time. Everyone can get success on the stock exchange on a one-time basis, but stable profit at a distance is really a skill worth learning. To be successful in the market, you need to first familiarize yourself with its capabilities.
A share is a security that allows its owner to participate in the management of the company and receive part of its profits.
If you bought a share, you have acquired a part of the company. If the company is successfully operating and making a profit, it means that your investments are working successfully — the price of shares is growing in the long term, dividends are paid on shares.
Why do companies issue shares?
Business, especially at the stage of development, needs financing. There is not enough equity to implement new projects, and therefore the necessary funds. To do this, the company can take a loan from a bank or issue bonds and become a debtor to their holders. But there is another way to attract financing — the sale of part of your own business in the form of shares. Thus, the company gets the opportunity to develop and receive additional profit at the expense of investors, and shareholders also receive income through the development of the business of which they are a part.
How to make money on stocks?
You don’t need to influence the way the company develops. The main point of buying shares is to make a profit from owning them. A shareholder can receive profit from dividends, or from the difference
between the purchase and sale prices of shares. Anyone can trade stocks. To do this, he needs to open a brokerage account, make funds and start shopping.
The difference between the cost of buying and selling a stock is your profit. Bought cheaper, and sold more expensive. But not everything is as simple as it may seem. Investing in stocks can bring both income and loss, and in order for your investments to be profitable, you need to take into account many parameters when choosing assets.
One of the most important parameters when choosing shares is the financial condition of the company and the valuation of its shares.
Every quarter, companies whose shares are traded on the stock exchange publish their financial statements. It is based on it that shareholders and potential investors can judge how much the company has earned, how it is going to develop its business further, what risks exist for the business. In addition to the indicators of revenue, profitability and net profit, there are others in the reports, the meaning of which the novice investor has no idea. In this case, it is better to turn to professionals. The Profitsforce intelligent stock valuation system tracks the financial conditions of companies. Multipliers, news background, stock liquidity, insider deals, all this takes into account the potential for growth or fall of stocks.
Another way to make money on stocks is to receive dividends.
Dividends are the regular payment of a portion of the company’s profits to shareholders. Each company has its own dividend policy, and not all corporations are ready to pay high dividends to their shareholders. Payments directly depend on the company’s profit — you have bought a part of the company and have the right to count on part of its income. The rating of reliable companies with high dividends is published once a month in the personal account of the Profitsforce user. Independent selection of companies in order to receive dividends on its shares is often a complex and time-consuming process. It is necessary to study the history of the company, the statistics of its dividend payments for the past period. You need to familiarize yourself with the company’s dividend policy. It is necessary to calculate the dividend yield based on the profit potential of the company in its forecasts.
