Article written by Sherin Dev; Follow me on TwitterIs it possible by any person to build a winning stock investment strategy for self? Yes. Anyone can do such. If you take the words from the experiences of great value investors, you may know the requirement of formulating our own intellectual framework to have a perfect and simple stock investing strategy to win as a stock investor. The very first step any direct stock investor must do is the requirements of building to have their own stock investing strategy than duplicating others. This would help him to avoid serious mistakes and even small mistakes too.
Whenever building your own investing strategy, lots of points to have taken care. This is to confirm your decision is perfect by going one by one to the points. Here is some investing strategy I have practiced and flowing till today. You can take a look to build your own one. Remember, any advanced knowledge on anything including accounting, is not required to win with stock investing. Once if you have heard such skills required, it is just a myth. Have a look on my own strategies to identify, valuate and invest on a particular stock.
Stock investment should happen only if the stock market valuations and selected stock valuations are fair. To invest in the stock, the business (company) must meet following criterion:
• A business should have one or more product or service in those enjoying monopolistic positions in the country.• The business should be an established on with long years of product and market experience in the nation and generating high profit consistently in each years.• A business should have presence across the nation through eminent networks and the product/service should available each and every corner of the nation.• A business shouldn’t be a commodity type. This means, the business should not have any competitor or provides room for future competitors to enter to the market with similar kinds of businesses. I never invest on any business that is not understandable. IT, Construction, Telecommunication sectors are some on it and should be avoidable.• The business should not have any debt or very little debt which is less than yearly net profit.• A business should have recorded consistent sales , owner earnings, net profit growth for a minimum of last 10 years including present year.• The business should have superior management driven by ideas to grow business at various economic and market conditions.• The company in any way issues no new shares to finance the business.• The stock price should be right to invest.
Hope you liked this article and it works for you to build your own intellectual framework connected to stock investing strategies. If you feel you can contribute some more important ideas to this section, you are most welcome to do so through a comment. This would help me to update my strategy or even think about that to frame it in better way.
Picture courtesy: J.J. Verhoef