EVALUATING STOCKS IS NOT A ROCKET SCIENCE ACTUALLY ITS QUITE EASY.ONCE YOU HAVE TRIED AND TESTED ITS FEW TIMES YOU WILL FIND IT VERY EASY.YOU WILL DEVELOP HABIT OF RESEARCH THAT YOU CAN REPEAT TIME AND AGAIN FIRST OF ALL ,YOU NEED TO KNOW THE MEANIN OF GROWTH AND VALUE OF INVESTING.FUNDAMENTAL ANALYSIS AND TECHNCAL ANALYSIS,KNOW SOME BASIC STOCK MEASUREMENTS.
WHAT IS GROWTH INVESTING THEN?
GROWTH INVESTORS SEEK FOR THOSE COMAPANIES THAT ARE SALES AND EARN TOO MUCH THOSE SORT OF COMPANIES HAVE A LOT OF POTENTIAL TO EARN AND GIVE BACK HANDSOMLY.
GROWTH STOCK HEAVILY DEPENDS ON ITS EARNINGS AND THE ACCELARATING OF THOSE EARNING,THE EXPECTATIONS OF ANALYSTS AND INVESTORS ARE QUITE HIGH.TOO MUCH DEPENDENCY ON EARNING LEADS TO HIGHER RISK.IF THE COMAPNY FAILS TO EARN THEN THE CHANCES OF STOCK GOING DOWN REMARKABLY.HENCE ,IF A COMPANY FAILS TO DELIVER THE EARNINGS THAT EVERY ONE HAS EXPECTED MAY NOT GO ACCORDINGLY TO PLAN.
VALUE INVESTING,
VALUE INVESTORS LOOK FOR THOSE STOCKS WHICH IS CHEAP.THEY COMPARE STOCKS WHICH IS CHEAP .THEY COMPARE STOCK WITH DIFFERENT MEASUREMENT TOOLS SUCH AS COMPANY’S BUSINESS,ITS EARNING ASSETS,CASH FLOW AND SALES VOLUME.THE IDEA BEHIND THIS IS YOU DON’T PAY TOO MUCH,THERE’S ALWAYS A LOW RISK.
VALUE INVESTORS PAY PARTICULAR ATTENTIONS TO DIVIDENDS.COMPANY THAT PAYS DIVIDEND EVEN IF THE STOCK DOES NOT RISE.THIS IS OF QUITE LOW RISK.