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Wysłany: Pon 17:19, 07 Mar 2011 Temat postu: tod 2109 |
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7 Tips to Check if YourShare Tips Are Any Good
An abundance of share tips for efficient investmentscan be found throughout the internet. Even experienced stockbrokers will attest to having benefitted from reading a share tip or two from one of the many investor-orientated publications. If you are a new investor taking your first foray into the world of the stock market, the question of whether the share tipsyou read have any truth to them has probably already crossed your mind. So, how do you separate the wheat from the chaff?
Google the Company
The first rule of stock investment - you should never, under any circumstances, purchase shares in a company of which you know nothing about. Thankfully, we live in a technological society that allows for the 24/7 access of information, and a wealth of company statisticscan be easily accessed via the internet. Almost every public limited company worth its salt will have information hosted on the web that will allow you to becomequickly acquainted with your prospective investment.
Press Releases
Public limited companiestend to publish press releases on a regular basis to communicate with their investors, and these can often give an insight into the financialstability of a company. Press releases are inevitably written in a positive tone, but if you come across a press release written in a way that cannot confirm a positive future for its sales or profit,[link widoczny dla zalogowanych], for example: ��uncertain growth prospects��, ask yourself whether investing at the present time would be a good idea. On the other hand, if the company has just discovered the largest platinum deposit in the world, investing now may not be such a bad idea.
Industry Trends
If the company belongs to an industry that is in high demand, or ifdemand for that industry looks set to increase dramatically, you should consider investing. The same can be said for trends that show a lack of demand. As an example, if gold prices are trending down and show no signs of improvement, steering clear of mining companies that rely heavily on gold as a primary source for their revenue would be a wise choice.
Share Price Trends
It is not always easy to read and understand share price trends. Ideally you should have someunderstanding and experience of technical analysis in order [link widoczny dla zalogowanych]rawa professional conclusion. Common sense is often the best practise. Ifthe share price of a company has been steadily going downhill for the past five years, you would need to be absolutely certain that drastic changes are currently underway within the company that will warrantyour investment and promise a return on it. It is rarely the case that the share price of a company has been unfairly punished, so unless you have some solid, insider information,[link widoczny dla zalogowanych], it would be wise to steer clear of any company showing a continual dip in its share-price trends.
Price Earnings ratio
There is one share price trend which will always give you an insight into whether a stock presents excellent value for money. The PE ratio puts the share price of a company against its latest published earnings per share. A high PE ratio means that you are investing a high price for a company that is not currently earning significant revenue - and vice versa. The PE ratio of a single company will not tell you a great deal regarding its financial future, but if the company has an extraordinarily high PE ratio when compared to that of its peers, this may indicate that the company has been overvalued,[link widoczny dla zalogowanych], hence its share price is more likely to drop than increase.
What Do Professional Analysts Think?
Stock analysts make a living from carrying out the above techniques, and publish their results into a report. This report will include up to date ratings and recommendations for investors. While such detailed reports are rarely accessible for free, a number of finance sites �C including Reuters �C often include a breakdown on their info sheets that will summarises the opinions of the analysts.
Consider WhoYourSource Is
Finally,[link widoczny dla zalogowanych], always remember that expert advice will only ever come from the stock market professional. An overheard whisper or a passing commentshould never influence your investment decision, certainly not in the same way that seeking the opinion of a respected stock picker in a major business periodical would.
Remember that investments that offer very high rates of return invariably carry an equal rate of risk. Smaller high-risk companies should be raising money through sources such as the government Enterprise Investment Scheme (EIS) - not from private investors. CSS is a privately owned investment management and corporate finance organisation authorised and regulated by the Financial Services Authority. This is the place to look for efficient investment. The articles written by the team on efficient investments are valuable references as well.Topics related articles:
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