Do you want to reliably make money at stock investing? You will want to avoid undue risk, pursue a no-nonsense approach to stock investing, learn to pick stocks, and manage a stock portfolio. The purpose of a no-nonsense approach to stock investing is that no one wants to waste time with non-essentials when there is other work to do and a life to be lived. Learn the basics of stock investing, devise an investing plan, and keep track of results. A no-nonsense approach to stock investing may not make you rich but it can add a comfortable nest egg at retirement. So, what how does one start with a no-nonsense approach to stock investing.
Learn to Read the Fundamentals
Fundamental analysis is the basis of a no-nonsense approach to stock investing. Sound investing is based on your own analysis and not on stock tips. If you subscribe to a stock alert service, that can be valuable. But you need to be adept at finding the margin of safety of a stock in which you are interested. Another question for no-nonsense stock investing is what is intrinsic value for the stocks that you evaluate? A stock with a low price to earnings ratio is often a good investment because the market is undervaluing it. This often happens when sales and profits go up and the market does not catch on. Buy this stock before the market realizes what a good deal it is and you will have a good long term investment to add to your stock portfolio.
Search for Value
A search for undervalued stocks does not end with a look at the price to earnings ratio. The intrinsic value of a stock is tied directly to anticipated long term earnings. Stocks in growth areas such as biotechnology can be great investments as a new anti-cancer drug or a cure for Alzheimer’s disease will be a cash cow far into the distant future. A no-nonsense approach to stock investing in this area requires that you do a bit of homework. Be especially careful of tips and do your own fundamental analysis. Stocks in biotech can rise and fall in price repeatedly as new products go through the FDA approval process. Although many traders seek to profit from the ups and downs of a stock in this sector, the goal of long term no-nonsense stock investing is to find a promising stock, get in early, and hold on until profits roll in. Because of the risk of holding a single one-product biotech stock many investors seek to hold several in order to balance out the risk of losing with an occasional big winner.
Stock Appreciation and Cash Flow
A good no-nonsense approach to stock investing for those nearing retirement is to invest in strong dividend stocks. In a person’s high earning years it makes more sense to invest in stocks with the potential to appreciate in value. As retirement nears a no-nonsense approach to stock investing suggests that you be in stocks that send a dividend check every quarter.