You’ve scoured the internet, you’ve read all the articles and you still haven’t figured out how to make a killing on the stock market. The truth is…you probably won’t. The stock market is a tool for people to invest their money and make growth over time. It is not a get rich quick scheme. Sure, if you are a gambler and you carefully research companies and can accurately speculate what the next trend is going to be – you can get rich.
But in reality, like anything else, making money on the stock market requires research, discipline and time.
There are companies that are likely to yield results…not specific companies…but ones that fit into specific profiles.
Share Price: The first way to make money on the stock market is an increase in share-price value. You purchase a stock at $10.00 per share and over the next fifteen years the price grows to $25.00 per share so the value of your holdings for this company haveincreased by $15.00 per share…minus any taxes of course. Sometimes stock prices get high and they split and then you own more shards. For example, you stock reaches $50.00 per share and then splits…so it is worth $25.00 per share again…only you have 100 shares instead of the original 50 you owned.
Dividends: Dividends are income paid out on stocks owned…usually quarterly.
Long term growth: Are you willing or able to hold onto your shares in the long term? Right now, actually a few months ago would have been better…stocks were at outlet prices…if you did your research and were ready to ride out the inevitable storms and volatility. You win. Don’t be too concerned with the day to day ups and downs…ride it out with the future in mind.
The company itself: Check out how much the company is worth. Not what they say it is worth but how much it would cost if you purchased all of the stock…the company’s market cap. This is an important distinction. On paper General Motors was worth a lot more than say e-bay…but if you owned e-bay stock.
Companies to look for: Those researching alternative energy. Research public companies, or ones about to go public, that are producing or researching alternative energy. Environmentally friendly companies that are profitable. Companies that sell high quality goods at low prices – think Wal-mart. Companies that manufacture staples or candy: Things you always need and are recession proof. We’ve owned Wal-Mart and Tootsie for years and I wouldn’t sell them. They are great performers.
Remember, the stock market is a long term way to make money…not a get rich scheme.
