"Investment Basics "

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How to Invest in the Best Companies

For many, investing in the best companies appears to be a puzzling endeavor. The key to minimizing your risk is to educate yourself. In his book "Cash Flow " Quadrant," Robert Kiyosaki states "the real risk of investing lies in the lack of financial education." Spend the time to become financially literate, or hire a broker to invest in the best companies for you

Instructions

Things You'll Need:

Financial Statements of Fortune 500 companies

Investment Basics

Step 1

The most important step before you invest in a company is reading its financial statements. You want to check for inconsistencies. Really dig into the sales, forecasts, and profits and losses. Did the company pay dividends to shareholders? How do assets compare to liabilities? What are the stock price projections?
Step 2

Determine the size and risk involved in your investment. Generally speaking, the smaller the company, the higher the perceived risk. Smaller companies are exposed to high volatility. The best companies will clearly show a growth trend in size and increased sales. Remember, your goal is to maximize your return on investment or ROI.
Step 3

Determine what investment amount is right for you. Assess how much personal financial risk you can financially handle. Look at your personal debt to income ratio. This is a good time to consult your broker or financial adviser.
Step 4

Now that you're actually ready to invest in your desired company, decide whether you are going to hire a broker or if you'll be handling things yourself. If you do use a broker, he or his firm will charge a commission for services. If you lack experience, hiring a broker may be your best bet while you continue to educate yourself. Determine the price and amount of stock you can purchase at that particular price.
Step 5

Here's where it gets interesting. Monitor your investment closely. See how your company is performing on the stock market. You need to develop a buy/sell strategy. Even when investing in the best companies, the best strategy is buy low, sell high.

Replies (5)

Guest

Thanks for sharing

CA Himanshu Bansal

Risk Manager

2345 Points Joined April 2008

Informative Article..TFS..

Nidhi

seo

30 Points Joined November 2009

Hi Sumit,

Thanks for posting such a wonderful article. Actually there are so many people around us who want to make some investments but they are not aware of how could they do so and in what way should they invest so that their money can grow without any risk. nice job dear.

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Ramalingam K

Founder & Director - Holistic Investment

21077 Points Joined October 2011

The Biggest Investment Mistake You Need To Avoid

There are so many investment mistakes. But which is THE BIGGEST investment mistake one need to avoid? Lack of diversification, looking for instant results, not having a plan, not assessing risk level, timing the market, following the crowd…… Though there are many common mistakes investors around the world make, there is one mistake which is the father of all other mistakes.

https://www.holisticinvestment.in/biggest-investment-mistake

Regards

Ramalingam K, MBA, CFP,

Director and Chief Financial Planner,

Holistic Investment Planners

“Best Performing Financial Advisor Award” Winners from CNBC TV18

www.holisticinvestment.in

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Misti

21 Points Joined May 2015

This is not a very simple question to answer because you are talking about company’s shares and with shares nothing is certain. The company, which is a riches height position in a single day, may start feeling the next day and Satyam is a very popular example in this case.

We will give you some better company’s for low risk and stable invest in better companies ideally 5- 10 stocks (equal portion) and in 3-5 sectors. If you are not a own trader/investor then limit your expose to BSE 30 or Nifty 50 stocks or up to BSE 100 stocks . You can see these stocks at

My current picks are

1. NMDC - Mining

2. Renuka - Sugar

3. Maruti - Automobile

4. Tata Steel - Metals

5. Bharti - Telcom

6. TCS/Infosys - IT

7. Ranbaxy - Pharma

If you are planning to invest in share market then in that case I would suggest you to do it only after collecting full information about the current markets after learning about it on the internet. When you then very sure about your decision try to take the help of any market expert who will accurately guide your investment. In order to find out full market fundamental and technical information or to find information about the shares of different companies, visit "trifidresearch.com", they have a daily track sheet section where reports are uploaded daily basis. Go through the track sheet and I am sure you will get a clear and a better picture of the market.

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