Motley Fool: Choosing Winning Stocks
There is no way to be absolutely certain that you will choose winning stocks. However, it is possible to put together an investment portfolio that is more likely to do well over the long haul. The Motley Fool offer 6 things that can help you win in the long term when it comes to stock investing:
- Show patience. Success doesn’t come overnight, and neither do solid stock returns. Start early, investing in companies that are fundamentally sound. Over time, you will see great rewards.
- Think small. Small companies with good potential are more likely to see growth than big companies. The big caps just don’t have much room to stretch.
- Penny stocks aren’t the answer. Stocks that trade for between $5 and $10 are great places to start. Many of them show solid value and good potential. Penny stocks rarely have the kind of growth that other stocks do.
- Dividends. This can be an indicator of future success. Also, if you can include some dividend reinvestment plans in your portfolio, you can benefit even more from dividend-paying companies.
- Shareholder interests. Does the company’s interests fall in line with shareholder interests? Look for management that tries to maximize shareholder benefit.
- Boring locations for headquarters. Instead of being located in an exciting big city, many stock market players are actually in the heartland. This means that, perhaps, it can be helpful to be away from the “excitement” of the big city.
Of course, not every company that fits these descriptions is going to go on to be a star. However, if you choose some solid investments and carefully screen your stock choices, you can put together a solid investment portfolio that will provide you with good returns.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
