A Stock Market Investment Plan That Never Lets You Down
Bulls and bears in the stock market are tempting and scary for speculative investors. They enchant the stock market's potential to help them make quick money with Big M while those who tread cautiously are often ashamed of losing. However, the stock market is not all about speculative gains or Tuesday black days. A place where committed companies are looking to raise funds to finance their activities. Serious investors can actually create wealth not only for themselves but also for corporations and the nation. The wise way to invest in the stock market is to empower yourself with the information you need to know and learn about the company you invest in, from past records and future plans.
No matter what Wall Street analysts expect or what economic indicators say, such as the Dow Jones average, the simple and guaranteed way to know that a company is doing a good job is to track how much profit you pay its shareholders each year. If profit rates are consistently rising each year, you know you have a safe bet. To take advantage of the future prospects for such companies, it is good to return the proceeds to the company. That means, instead of adding profits to your savings, you can invest them in the same company shares. This way you can make sure that the profits you receive are always higher than you got last with a larger number of stocks getting added to your investment portfolio each time.
With this kind of assured investment plan in place, investors with a gambling line begin to think beyond quick gains.
While those who were afraid of risk become wiser
Let's find out why companies that are giving increasing revenues from cash profits are a good investment option:
Your share goes up as well as your earnings
Your income starts to rise as you have more shares every year and profit income rises in the same way
Your earnings income rises even if stock prices do not rise
No longer at the mercy of the market regardless of the value of your shares, continue to earn additional cash profits. In fact, even if the market price fell, you are still in the advantage, because it allows you to re-invest to buy more shares.
You do not have inflation
With higher earnings per year, you are compensating for the effects of rising inflation. This in particular provides relief to people who have retired and depend on regular cash flow to help them pay for their expenses. At this stage one does not need to retreat from investing in stocks instead, the cash dividend can be used as a kind of regular retirement money.
The ingenuity behind this investment strategy is that it protects you from the fluctuations that usually occur in the market. The low price of the stock market means only that you buy more to increase your profits more and it is advisable to start this strategy early in life while you are still working so that your wealth accumulates gradually and continuously on Over the years. You are sure of regular income, as you grow older.
Remember, the success of this proven investment plan depends heavily on the record of the company you invest in. This should be the one that announces an increase in profits at the end of each financial period. A simple way to know this would be to calculate the revenue return. You can do this by dividing the annual earnings per share by the price per share. Of course, no investment can be completely free of risk, nor does this investment. Keep track of earnings returns, and if they go down, the signal you to give up investment.