What is your biggest fear when it comes to investing? For most people it is the fear of losing their hard earned money. It is the fear that they’ll make a mistake and make the wrong investment. The solution is to invest wisely and not haphazardly.
The investors who have the most to fear are the ones that:
Wise investing is simple and before you invest in any company answer the following questions:
1. Will people still be using this company’s product or service in 20 years?
2. Does the company have a history of consistently increasing earnings over the last 10 years (check the earnings per share “EPS” values)?
3. Does the company have a history of consistently increasing dividends over the last 10 years (check the dividend per share values)?
4. Does it have a low P/E ratio?
5. Does the company have low debt (check the Long-term Debt-to-Equity Ratio)?
6. Is the company’s current dividend yield greater than its average dividend yield?
The above 6 six questions can save you from making mistakes and losing your hard earned money. The above questions are simple but powerful, in essence they help you find companies that are:
Understanding what you are buying will help to alleviate your fears about investing.
Focus on quality companies when they are undervalued, and you’ll minimize your risks and increase your gains.
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