Buying Strategies-Stock Investment
From Financial Literacy Wiki
Buying Strategies-Stock Investment
Contents |
Target and hold blue chips
Blue chips are suitable for people who do not have time to monitor the market and they are usually the first to benefit in any uptrend
Promising Business models
This is somewhat similar to Warren Buffet's investment style where the business model have great influence on his stock decision.
Look for promising 'turnaround' companies
These companies are usually ignored by investors and their stock prices are at the bottom. Studying the development of such companies might let you know when they are making a turnaround.
Look for bad news
Bad news that have temporary effect on companies usually will drive stock prices down, that is when buying opportunity comes in.
Spot undervalued stocks using PE ratio
Company stocks that have low PE ratios and having robust earnings growth might be a good stock to buy. Low or high has to be measured against those other companies from the same industry.
Identify bargain buys using PB ratio
Stocks that trade at a discount to its book value are worth looking into. This strategy usually applies to property developers and fiance companies which depend greatly on their assets for income generation.
