what do you consider before buying stocks (stocks exchange)?

Question

regardless of studying the trend:
-you buy low
-you buy stocks that is growing but lately notice (at high)

problem:
-if you buy low, you might bought a declining stock(value)
-if you buy high, you might bought a stock that is on its peak and the tendency is to go down

Answer 1

i invest in high quality stocks. i pick one very carefully, calculate its intrinsic value and buy if it is lower than its margin of safety. warren buffet way!

Short term price plummet shouldn't affect long term investment return. in fact, i buy more stocks when it is 'cheaper' as the market will eventually 'realised' its true value later in the 'future'. It is up to your financial goals and investment strategy how should you invest.

Answer 2

--What is the economy doing?
--Does the stock market accurately reflect it?
--How much money can I afford to lose?
--What is the market for the company I'm considering?
--What do I know about the company? Do they have their stuff together? The SEC is a good start for glimpses into a companies finances. Everything from lawsuits to their most recent scandals can be confirmed from those reports.
--Buy low and sell high is a general strategy only. No matter how low your stock price, if, as you say, the company is faltering or the market is declining in that area, the strategy does you no good. Conversely, buying high also has its risks as you have pointed out. The trick is to learn to calculate the value of a stock and try to determine how much potential there is for a price increase. You must also be ready to sell when the time is right and even buy the same stock again at a lower price.
--Studying a group of stocks in a particular market will help to determine how much growth potential yours has.
--Some well-established companies pay dividends that makeup for the cyclical fluctations in stock prices. Most of these, however, have fairly expensive per share values. Microsoft, for example, pays a dividend and trades lately for about 28 per share. It moves small percentages up and down regularly but the dividend it pays more than makes up for those fluctations. Yet, it will cost you 2,800 for just 100 shares. Your dividend at roughly .40 per share per quarter will be 40. Over time this will build, but at this rate it will take long.
--Try growth companies if your initial investment if very limited and keep close track of that particular market and of course whatever stock you have invested in within that market.
--Good research, a fearless cautious attitude, and a sound financial plan will help you immensely.
--Right now the market is too volatile for a beginner. Watch it longer before you take the plunge.
--Look into what is happening with Sirius and XM. If you can, get in on Sirius while it is low. After the expected merger, you won't see Sirius so low again.

Remember the golden rule of investing: Don't invest what you cannot afford to lose.

Good luck.

Answer 3

Your problem issues are noted, but don't take into account that you invest for the long term and not the short. So the idea of buying low is so dollar-cost averaging takes control and brings you eventual gains by having more stocks. Unless the stock you're buying is another Eron or a Dot-com that is going nowhere, your stock will rebound at some point and even raise. That it why you take a look at the year end trend of a stock that you hope to jump in on, then you take a chance. Either way the stock market isn't a fools game nor is it 100% safe. Everyone will tell you that it's a gamble, because it is.

Answer 4

I don't buy stocks I do options but the same principals apply. I look at the trend of the stock and then compare it to the trend of the industry it's in. If those look good I do a fundamental and technical analysis. The latter is personal preference to all. I look at P/E ratio, Acc. Dist. Current, Cash flow, Debt. I look at ROE to be better than 20%. Sales, EPS, Dividend percentages have to be incresing over recent years, 3-5. I look at next years financial estimates to be better than current, and next quarters to be better than current. These have to have no supprises/negatives in recent earnings reports. I look at Company vs. Industry EPS growth rates. It's better if the Company is out performing the Industry that it's in.

Answer 5

Used to look for tech stocks with upside value ,
Then the bubble popped and I looked for high dividend yield stocks .
Meanwhile the real estate & credit markets went into a bubble so Now . . .
I check their debt / revenue , and try to avoid those with more than 50% debt to revenue .
Also look for those with YOY earnings growth , preferably in the double digits .
This is easily found on Yahoo finance . After entering a symbol for a quote , there is a key stats link that has the debt , revenue and growth info . . .
like for apple > > >

http://finance.yahoo.com/q/ks?s=AAPL

Alough they are one of the rare companies with NO debt so the debt to revenue is super easy !

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