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Tuesday, January 31, 2023

how to pick stocks for long term: Analysis, mindset and Investors

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There is only 5% of people in India who do Invest in the share market. Every person wants to earn six-figure or more money but they don’t know how to do investment in the share market. So, in this blog, we are going to discuss few steps that how to pick good and long term stocks for the best return which will help you to make rich. There is 50% of people in the USA who are literate about investment and the stock market.

fundamental analysis of stocks

There is too many fundamental factors that decide the stock or share is good or not but the first priority is goes to the study of management, If company management is excellent then company work very well.

If you want to invest for long term then you need to do study on fundamental analysis of that stock. Balance sheet give you information about assets and liabilities of that company and if asset is maximum that liabilities then the company perform very and vise versa. P/E ratio is one of the best parameter to do a fundamental analysis. If the management of company are doing well with positive point of view then the whole company run excellent so, the first priority is goes to management of company.

Stocks

Technical Analysis of stock

For short term investment technical analysis is important but some time technical analysis are works for long term investment also. charts, candle sticks, indicators are the most famous parameters of technical analysis.

Stocks which you hold for short term i.e. less than 1 year are give you less returns but for buying and selling of shares need technical analysis. Whenever you decided to pick a good stock for long term investment then you need to know before 2 years of chart pattern of that company.

Diversified Portfolio

Investors who invest in multiple stocks are reduce the percentage of risk because they have investment in different different sectors. One genius man says that “never put your all eggs in one basket”. If you to invest in share market but with minimum risk then you should try out the diversify portfolio.

Investment in 1 stocks likely to get more risk but in multiple stocks get you a consistent returns on your investment and reduce the risk ratio of your loss.

Our India is fastest growth economy in the world it means the every sector of India can grow very fast and clean. So, if you invest in shares which will help India to grow in next 10 Year.

Mindset behind picking shares

Whenever you pick a stock for long term and invest in it with point view of get high return then you are study in that company are very deeply and read all related documents carefully. Be positive and confident when you pick stock or shares for long term. keep updated yourself daily and read financial news, watch tv channels, install financial application for mobile. sometimes stocks may down after buying shares but if you are long term holder of that share the you should never scared about small fluctuation.

Person who did financial planning very well those person are well updated about our share market and he know every situation of share market. Financial Reports are most important part of your long term stock. In financial reports of company investor should need to read balance sheets and ratios Health Insurance.

Industry analysis

After doing a Fundamental and Technical Analysis of company Industry Analysis also important in which you need to differentiate the managements of that company and their industry. Inn India their is Lots of Industry are present but their is no need to get knowledge of every Industry, You just keep a Information of particular Industries which you want to Invest.

To determine a best stocks, you have to study about their industry because Industry analysis give you overall results of each company.

Types of investors

Profit oriented investors

This investors are risk takers and this are just analyze a stocks with high profit. If company announced Dividend, stock split, right, etc. then this are invest immediately to get a high profit but don’t think that this investors get profit every time they also see a big big losses. Short term investment is most favorite faculty of those investors because they don’t have a patience for long term.

wealth oriented investors

Wealth is most important part of our life and we should need to collect the wealth for our retirement but their is very few investors who are invest in share market for long term. If you are long term investor then you are on right way to get huge wealth because wealth creation is just for a long term investor not for short term investor or trader. warren buffet are always support too wealth creation.

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