Planning To Invest In Stocks? Know The Basics Of Selecting A Stock

The Buyt Desk

The stock market is not an unfamiliar term to many Indians irrespective of whether they invest in shares or not. Most of us encounter these words either through friends, relatives or banks and investment officers.

With our surroundings, we have gotten too accustomed to the share market, but when it comes to investing, most of us either have no knowledge about the process or have partial knowledge, which is hardly of any help.

This article covers everything you must know about investment in the stock market, such as how to pick stocks to invest in? How much to invest? Let’s bring you some points that you should look at before you choose a stock to invest in-

Know Their Business: When you invest in the stock market, you become a part of their business. In business, what matters is the performance and consistency in performance. Would you ever lend money to a person who has weak credibility? No, the same thumb rule applies to business as well. Never buy shares of the company which isn’t performing.

All you have to do to check a company’s consistency in the last few years is check its balance sheet. Check if the company is growing, sticking to its commitments, etc. Investment decisions should not be taken in haste.

Check Out Literature – It is mandatory for companies listed in the stock market to make their performance report public. This can help you understand the company’s balance sheet. Check every literature available that tells about company performance whose stock you are considering. Also, check their current projects, their expertise and upcoming projects. Analyze whether it will grow in the future or not.

Know the Strength Of the Company – Industry screening is one of the best ways to find good stock. After selecting the industry, check the stock performance you are interested in and compare its performance with competitors. Check how the company is performing, factors that give it an edge over its competitors, etc.

Evaluate Executive Leadership – If the company has effective leadership, it will foster a smooth and progressive work culture. A well-managed company enjoys a good stock price for a lasting time. Check leadership’s expertise and how they are translating it to add value to their organization. Listen to their vision to get an idea of what the company is planning to do in the future.

Here are seven points you should consider when choosing a stock