investment strategy example
investment strategy example: when Choosing a company-Issuer's need to immediately pay attention to the amount of quarterly profit growth. It reflects the growth of income per ordinary share, but we will not consider the specifics. For comparison, you need to take the current figure and the figure of the corresponding quarter of the previous year (for example, in the III quarter of 2008 and third quarter of 2009). To do so is because many of the companies fit in a certain economic cycle, reflecting the seasonal nature of income and expenses. So, the cars in the spring and summer are sold better than in the winter period, and the cost of electricity, in turn, increases with the onset of cold weather.
Further it is necessary to pay attention to the profit of the enterprise on results of the year, or rather on its change in relation to profit for the last year. The next step will be weeding the companies, whose sales are growing with the lack of speed. Because without growth in sales even growing profit can be quite bad sign. It can be obtained by reduction of costs, and it is already a «beacon», which can testify to the breaking of tendencies of change of rate of shares in the negative plane.
investment strategy example:
When everything is done, you need to have the remaining companies look at the dynamics of changes in profits. Naturally, you should be interested in the company with the maximum growth. Therefore, if after the previous filtering you are still a lot of candidates to invest, the odd number of them can be eliminated by this parameter.
Continuing the theme, we advise you to pay attention to the return on equity. This indicator reflects the stability of the company. It can be used on a par with the previous one, for the decisive dropout suspicious companies.
Among all the indicators most important is the dynamics of growth of profit, the rest are just to help you choose the best candidates for the vacant seats in the investment portfolio.
Why is all this necessary? Elementary - we will use the growth shares. Securities which attract a maximum number of investors. Speaking of points of entry/exit, I must say that the strategy can be built on the theory of trade bill Williams chaos or the theory of wave analysis of Elliott.
investment strategy example - good Luck to you in your endeavors!
