Stock Trading- Some Ideas
Which kind of stock trading are you capable of doing?
The (really) small investor: You're just starting out and have less than £5,000 to invest but would like to begin stock trading with it.
The buy-and-hold investor: Your life is too busy to deal with with investments all day long; you either stick mostly to mutual funds or have a portfolio of stocks that doesn't change over the short term.
The active trader: You trade in and out of investments all day long, or at least a few times a month. You're always looking for an angle that allows you to squeeze that little bit extra from every deal.
The handheld investor: You're someone who wants help through the trading jungle.
The big cheese: Your investable assets are somewhere between £500,000 and £5 million. Congrats! If you have this or more to invest, you'll have to beat the brokers off with a stick!
Once you've decided, here are some questions to ask about the stock you're keen on trading in:
- Demand - How big is the market for what they offer?
- Longevity - How long could their products last in the marketplace?
- Future - Are there more products being developed?
- Industry - Is the business's industry expanding or contracting?
- Trends - Will you be ahead or behind the trends?
- Timing - Are you early or late in the product and industry life cycle?
- Products - Do they provide value for money to the consumer?
- Uniqueness - Does the company have any exclusivity, patents, etc?
- Competition - Who are they competing with?
- Profitability - What are the profit margins like?
- Compensation - How much can you make?
- ROI - How much do make back on your initial investment?
- Company - How long have they been in business?
- Management - Who's running the show?
- Legality - Does the company trade lawfully in all its operations?
- Public or Private - Is the company listed on the stock market?
- Global or Local - Does the company sell worldwide or locally?
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