Stocks And Money Information

If you are investing in any stock you should look for certain fundamental points to identify the sectors and  companies that can help achieve gains of several hundreds percent and more. Most important point that you should consider is whether the Company has right kind of products & services and whether there is enough potential for increase in sales that can last for several years. This means that it is not sufficient to make a one time profit. The company should be able to make substantial profits by increase in sales over a period of many years.

Even the best of outstanding companies may not be expected to grow years after year in sales. The general business cycle and market conditions will also have a major influence on year-to-year comparisons. Therefore it would be inappropriate to judge growth on annual basis but should be judged taking into several years of boom and bust cycle in the market. Companies may be fortunate enough to be in best sectors but it is the management that ensures continued success of the company and the stock in the market. . It must continue to keep a high level of business skills, otherwise it will not be able to capitalize opportunities and to defend its compet¬itive position others.

While choosing any stock for long term investment you to ensure that the management is innovative and continue to develop products, new businesses and processes that will further increase sales potentials. This is in addition to exploitation of existing market potential. Companies may have a good growth prospect for the ensuing few years because of new demand for existing lines. But if they do not have new products, businesses or processes it is not a good stock to invest.

Take for example APPLE Inc. after a slump in 1990’s the management started a process of innovation. They came with IMAC desk top McIntosh computers in 1998 which was a hit. While the sales IMAC was growing year after year they came with the blockbuster IPOD in 2001. The sale of IPOD is in billions of dollars every year even as on 2008. They then came with IPHONE which is proving to be another blockbuster. Stock market has rewarded this stock handsomely. A $10000 invested in APPLE in 1997 would be $400,000 in 2007. This is an astounding 4000% returns over 10 years period.

The stock market always presents an opportunity for great fortunes. For a common investors however the stock market fluctuations, the boom and bust cycles, bear market, bull market and such complicated terms may seem too intimidating. While great fortunes in stocks were made by betting on business cycles it is not possible for a common investor to understand and predict this cycle. Even professional fund houses and savvy investors with advanced information have failed in this front.

What is the best strategy for a common investor? Identify an outstanding good company and stay with it in all good and bad times. Do not get panicked by bust cycle, bear market grip etc. If you study the top 100  companies which are listed in NASDAQ, NYSE, European stock markets, etc. you will observe that most companies’ stocks which you could have bought for $1000 some 15 years ago are worth $50,000 and much more. Within the lifespan of most investors huge opportunities were available to make substantial fortunes for oneself or one's children.

Good Day!