16 Jul Tips for Choosing the Best Stock with Fundamental and Technical Analysis
Stock is an investment instrument that is quite popular until now, true shares are long-term investment instruments that are very profitable but before we talks too much we can share good information how you choosing the best stock specially when you are newbie in stocks market . The benefits are given in the form of capital gains and dividends. Indeed in terms of profits, stocks are a lucrative investment. However, behind these profits is the risk of capital loss.
Of course, stock investment is very different from other investment instruments, such as property, time savings, deposits, gold, bonds, or mutual funds. Each investment has advantages and disadvantages of each. However, among the various investment instruments, the one which gives a big profit in a short time is stock investment. That’s why we have to be very careful for choosing the best stock.
Tips for Choosing the best Stock Based on Fundamental Analysis
From the analysis conducted with fundamental analysis, what needs to be considered is the reference to determine the good or bad of the shares. The following are the criteria that can be used as a reference,
- Has a market capitalization
- Issuers that have a clear and good business model.
- The company is consistent in increasing earnings / shares from quarter to quarter.
- The company does not have a debt that is greater than the Debt Equity Ratio (DER).
- Stocks become market leaders.
- Average Price Earning Ratio (PER) is not much different.
Fyi, quick tips for you that making banking stocks and large companies in the field of consumer goods as good decision for choosing the best stock for your portfolio, certainly could be the wisest way to play stocks for beginners. Why?
Because this is a company with a simple business. In addition, their products are also used by the public, automatically in a year they always make significant profits.
Choosing the best stock with analytic technical
Fundamental analysis tends to be more on the analysis of fundament analysis and based on news tragedy, technical analysis instead emphasizes the use of historical data regarding changes in stock prices, trading volume, and other market indicators. Actually, technical analysis is commonly used in stock exchanges, commodity exchanges, or other markets that are affected by demand and supply.
By using technical analysis, analysts or investors use more market data, such as support and resistance in the past as well as trading volume. This trading volume data is considerate in finding a general description of market conditions to more easily predict future price trends.
Trading volume is usually also associated with an increase or decrease in stock prices. The well-known term is bearish, which is a market pattern with falling prices followed by high sales volume. Normally, the investor using indicator for analyzing, such as moving average (MA), double top/double down, head & shoulder, triangle, dan support level & resistance level.
Trading or investing? What is the best choice?
You must determine whether you want to become a trader or an investor. Traders themselves have the nature to seek profits from prices that can sometimes go up or down in a relatively short time.
Meanwhile, if you become an investor, you are advised to keep stocks for a long time and harvest the profits in the future. Many people suffer losses because it is unstable to decide whether to become a trader or an investor.
This relates to your goals in choosing the best stock. Because if you will choose trading, then you can choose stocks that can move fast (short time) and you will take advantage of these price movements with multiple profits. I guess this is not best choice for newbie investors. But if you want to try it please, as long as you don’t buy a company with unclear fundamentals. For example, companies that have been recording huge losses over the past few years.
There are also those who make profit when it is profitable only 1 or 2 percent. However, fortunately they use a very large capital for the stock.
But if you choosing the best stock for invest, then choose it with a good financial reports and can give you profits monthly or even yearly. Look for liquid stock! Beware of volatile stock, it was a trap for in Stock investment is an investment instrument with the best return in the best timeframe, which has been proven in various stock markets throughout the world. By investing stocks, you can become a business owner run by professional management.
Find your broker for your investment, that will help you for choosing the best stock for your investment. Remember golden rule from Warren Buffet; “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”