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Three Things to Do Before Buying a Stock
posted Feb 13 '17 by adamsmiths
Three Things to Do Before Buying a Stock

Taking a decision to trade is a huge thing. Trading in stock markets have existed right from the 17th century, and their popularity have only enhanced with time by leaps and bounds. The London Stock Exchange (LSE), the New York Stock Exchange (NYSE), or the Nasdaq-500. The costliest shares are from the companies listed on Fortune-500 (A few of those are ExxonMobil, Wal-Mart and Apple). We tend to purchase the shares or companies which we view as bullish (expected to enhance their profits in the coming years) and sell the shares of companies that appear to be going on a downward spiral (or bearish). But luck definitely does not favour one every single time, and hence it is useless and potentially dangerous to go on a share-purchasing spree without first taking into account all the pros and cons and avoiding expert advice. Below are listed a few of the things that a trader has to take into consideration if they hope to earn a substantial profit. (Information credit: https://www.cornertrader.ch/
Do Macro-analysis: First and foremost, you would need to understand the way macro-analysis works. Macro-analysis is the study of conspicuous and large-scale things in an economy. Some of the macro-economic factors are: investments, growth of employment rate, inflation etc. So you need to have an eye for the major socio-economic or political events taking place within the country or in the world which is likely to have a major impact on the prices of currency and stocks. If the political situation in your country is tension-filled, then money is likely to fly out of the coffers. So it would be a good time to engage in hedging and diversifying your portfolio, investing in commodity trading (especially precious metals such as gold) and to sell off a major portion of your stocks. In order to know which prices would shoot up and what shares would diminish, keep note of major economic and political events that have a possibility of taking place in future; or consult a skilled broker who can provide you excellent advice.
Gather the Data on GDP, GNP and other Indices: A few major indicators of economy are: Gross Domestic Product, Gross National product, Producer Price Indices, Consumer Price Index and the interest rates decided by your National Bank. It is possible to either download the historical data to Excel or to get access to a graph by making use of tools which are interactive in nature. If possible, look up the website of the Finance Ministry/Secretariat of your country.
Minutely Observe The Data In Order To Interpret It: You should take a general look at the direction that the data is pointing towards, and take into account the emerging patterns. You can try this one, for instance: divide the GDP of one whole year by the numerical value from the past year. This provides you with the authentic percentage for GDP growth and helps you to make decisions.
If you get all of these correct, then you would surely receive a good guidance by way of which shares to invest in and which ones to avoid.

You have a good point. It is nice to read your thoughts about buying
posted Jul 01 '17 by mikehills101
You have a good point. It is nice to read your thoughts about buying stocks.

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