How to Do Better and Succeed in the Stock Market?
I hear people regularly say that the stock market is a complicated investment to take part in. You might have even said that only those with all the financial knowledge in the world can truly be a stock investor. Now, it is true that you need some level of knowledge, but it is not true that you have to have years of expertise and degrees to succeed. Hello, and welcome to my blog. Here you get all the information that you need to learn about stock investment, finance, and passive investment.
Stocks are easy to take part in, and anyone can do it irrespective of age, gender, education, race or experience. As long as you are determined and committed to learning, then you can learn. In this post, I will be giving you an insight on how to do better in the stock market. You can check out some of my posts like Learning How to Make Wise Investments to help you learn the ropes of stock market investment. I have so many resources that will be excellent in getting you on-board stock investment.
Before I go on, I would like to say that my experience can only be a guide for you. It is not professional advice, and over the years, I have done well and badly. The stock market is naturally unpredictable, so you need to be ready for the best as much as you need to be ready for the worst.
Professional help or self investing
So many people turn to professional investment companies or personal investment managers to help them do well in their stocks and returns. But the truth is that even these so-called professionals have periods of bad results. Even when the stock market has a performance rise of 10 %, many of them under-perform. They don’t come as close to benefiting from the 10% increase in the stock market.
This is why I recommend going for investment on your terms. Learn the ropes, learn from your mistakes and progress. Before I wrote this post, I went over my successes and failures in the stock market and found out where I went wrong and where I went right. My conclusion has led me to create this post. Getting a better return on the stock investment has more to do with the background of the company and the things that truly make it successful from the background. Without any other delay, let me get to it.
What determines the success of a stock?
Three points truly affect the stock of any company. These points are a deciding factor in how successful the stock will most likely be.
The state of the company: This is the first step which means that you have to know the background of the company. You should also know how well they are faring in the economy. How are their products being accepted? Do they have a promising future? Is there room for diversification? How is their financial statement? Do they have more liabilities and debts than assets and profit? Are they surviving well among competitors?
Generally, you have to figure out where they stand financially and economically. You might even need to look at how well they and their subsidiaries are going. Or how well their competitors are going. If things seem to be in favour of their competitors, then they might not be the best company to depend on.
However, this point is not the deciding factor in a stock’s progress and return. Numerous stocks have a really good back story, excellent management and growth economically, but they are a bad investment choice financially. So if this is not a deciding factor, then what is? Find out below in the next point.
The stock of the company must be sold off: As I said, it is not just about having a great company with great financial books. It is about getting the stocks actually to be bought when they get to the stock market. For an investor, there are hundreds of companies available to you. Most times, it is really hard to find a good company amid great companies. Most just go for companies that are thriving in terms of popularity of the stock market.
What this indicates is that even though there are really good stocks out there because they have not been pushed and marketed well, they will forever remain hidden. A hidden stock will get you nowhere for the company and the investor. This issue boils down to the management of the company and how well they concentrate on advertising and marketing themselves to potential buyers. This is one deciding factor, but then there is one more which is the right sales team.
The right sales team: As I said, it is all about how well the sales team can market the company. A stock which is well marketed will most definitely gain attention and rise to greatness if, and only if, those in charge, those in the management and marketing departments can sell the company to investors. Investors want to see progress and returns, and if a company is doing so, they can sell themselves to potential buyers. However, many companies do not have the skill set to make people believe in the impossible.
Some companies could have really good ideas but cannot promote themselves to attract the attention they deserve. A company like that is not worthy of being a part of the stock market because they will generally never grow and will keep under-performing in the financial world. A company that truly makes use of promoting themselves will see a success margin that beats expectations. Take Apple, for instance, they succeeded and are still succeeding in selling their company to the world. Each year they come out with a slight change in features, but they sell it so well that people go ahead and buy the new brand.
Elon Musk’s Tesla is another brand that has done exceedingly well in terms of being able to sell itself. The company was able to convince people of the possibility of electric cars coming to reality, and here they are with hundreds of investors just following on that belief. For any company outperforming the stock market doesn’t mean you go 20, 30 or 50% better. It just means that you can consistently maintain 1, 2, 3, or 5 per cent higher than what the stock market has offered as a gaining possibility. Consistency for years will automatically give your company returns that will favour everyone.
High buying investors: Finally, this is a secret point I would like to add, and it is that a stock is also dependent on how well the stock is being invested. It is about how much investors are buying and selling off each day. It’s not okay to have small-time everyday people invest a few dollars, pounds or euro to your stock. It is important to have those big investors who will put in millions at a time in stock. And who are those that invest? They are not the big individual investors, these will not invest millions in just one stock; it’s just too risky for them. It is the investment managers that are loaded with millions from those who have little knowledge or time to invest in a company. If a stock hasn’t got them yet, then it could be difficult to see turnover and growth.
As much as many companies long for these investment managers, these managers are also a hindrance to your success in earning well in the stock market. How? You may ask, well once these managers get a hold of a company that will thrive and maybe is already thriving they horde it so badly that no one else gets even a chunk of it. This means you, as a small-time investor has lost out. But that can be prevented.
How to get to a promising company before the fund managers do?
The truth is you can get to a company before these managers. Many of them are long term investors and are older and more uncertain. Of course, they have to be careful since they are using client’s funds to invest. If anything goes wrong, so does their business and standard. Now, this is a good thing for you as an individual investor.
Begin by doing your research and fishing out those companies that are doing well with poor advertising. Once you do, you can quickly make your investment and hold it. These fund managers take time to invest. Even when they have been pitched a company, they ignore it until noticeable proof is seen. Before then, you would have gotten your position and you can just sit back as they pump in money and increase the value of the stock.
Investing in stock is all about timing and maths. If you can find a promising company with the future for growth hold on to it. The possibility that they will become popular and the next big thing is large. As I said earlier, investment is unpredictable, so you have to be willing to take risks while you invest. Have you invested in a stock that didn’t seem very popular or good but then got really good returns? If you have let me know in the comment section. Kindly like and share if you found the blog useful. To get more exciting content as soon as they land, subscribe to the channel.
Recommended for further reading:
- The Definitive Book on Value Investing
- A Plain English Guide to Thinking Globally and Investing Wisely
- Learn how to make more money and transform your life
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
- Stock Market Investing For Beginners: The Investment Guide