Best Choice of Long Term Investment in Stock Market
It is a fact that stock market investment involves a high risky especially investing for dummies. Stock picking is a very important decision to determine winning or losing money. Investing in blue chip stocks can be highly rewarding over the long term even they not have the allure of a hot high-tech investment.
According to statistics, it shown that there are no 20 years portfolios that have lost on the stock market in long term investment. Blue chip investing has generated a return averaged about 10 percent and theses investors all have a broadly diversified portfolio of stocks.
Generally, stock investors are at the bottom of a company "food chain". The company has to pay to their staffs and suppliers follow by bondholders, and then come to the preferred shareholders. The company has an obligation to pay all these stakeholders first. Stockholders only get paid via dividends if there is money leftover. That is reason why stock investing is risky because investors never know exactly about their return of investment. It can be happen that a lot of money left over for stockholders or a case of oppositely situation.
However, there are some attractive reasons why investors prefer to choose blue chip stocks for their long term investments:
a) Generate return of between 11 to 15 percent annually depending how aggressive an investor is
b) There is no ongoing fee like mutual funds investment
c) Investor be an owner of a company
Suppose investors decided to choose blue chip as long term investment, they would want to find stocks that have sustainable competitive advantages along with stable growth. The key for finding these stocks is by looking at the historical performance of each stock over the past decades and do a simple business S.W.O.T. (Strength-weakness-opportunity-threat) analysis on the company.
Choosing a blue chip from appropriate company is just one of the actions of the battle. The next action is that determine the right price to place. Basically, stock prices are driven by investors' expectations for a blue chip company, the more favorable expectation the high stock price. The price can swing widely in short-term but they eventually converge to their intrinsic value over the long-term.
According to statistics, it shown that there are no 20 years portfolios that have lost on the stock market in long term investment. Blue chip investing has generated a return averaged about 10 percent and theses investors all have a broadly diversified portfolio of stocks.
Generally, stock investors are at the bottom of a company "food chain". The company has to pay to their staffs and suppliers follow by bondholders, and then come to the preferred shareholders. The company has an obligation to pay all these stakeholders first. Stockholders only get paid via dividends if there is money leftover. That is reason why stock investing is risky because investors never know exactly about their return of investment. It can be happen that a lot of money left over for stockholders or a case of oppositely situation.
However, there are some attractive reasons why investors prefer to choose blue chip stocks for their long term investments:
a) Generate return of between 11 to 15 percent annually depending how aggressive an investor is
b) There is no ongoing fee like mutual funds investment
c) Investor be an owner of a company
Suppose investors decided to choose blue chip as long term investment, they would want to find stocks that have sustainable competitive advantages along with stable growth. The key for finding these stocks is by looking at the historical performance of each stock over the past decades and do a simple business S.W.O.T. (Strength-weakness-opportunity-threat) analysis on the company.
Choosing a blue chip from appropriate company is just one of the actions of the battle. The next action is that determine the right price to place. Basically, stock prices are driven by investors' expectations for a blue chip company, the more favorable expectation the high stock price. The price can swing widely in short-term but they eventually converge to their intrinsic value over the long-term.
Investing for Dummies to Make Money
Earn money by using Japanese candlestick charting for technical analysis of stock trends and proven trading courses of investing for dummies.
by investingfordummies
Winson Ong is author of an investing guide website which presenting and stock trading course and candlestick chart information to help investors stay away... more »
- 0 featured lenses
- Winner of 2 trophies!
- Top lens »
Feeling creative?
Create a Lens!
