How To Become Smart Investor To Gain More Profit In 2021

How To Become Smart Investor To Gain More Profit In 2021

We have already written some articles on investing and picking up the best stock in our website invest web. Well, this article will help you to invest smartly which you may be missing while investing.


Points To Focus On To Become Smart Investor

Below are some of the points that you need to try and practice in your journey to become a smart investor. Always do your research before investing.

1) Never Forget About Income

Never Forget About Income

If you are still in age to work then the first priority should be working on income. It may be monthly or daily. If you get an income consistency then there is a great chance that you make a huge amount of investment by consistent investment.

2) Focus On High Yield Good Established Stocks.

The riskiest investments are low yield stocks. Low yield is a dirty word. And low yield companies have low risk, and it’s easier to beat the market investing in such stocks. However, you should also try to add stocks that have a higher yield. Such stocks are risky, but they have lower risk than low yield.

If you’re a risk-averse investor, or even if you’re an income investor, you should only invest in stocks that offer yield in excess of 2%. In other words, you should start investing in high yield dividend stocks.

When investing in high yield dividend stocks, try to find stocks that will yield at least 5%. Keep in mind that you will probably have to hold the stocks for a few years before they pay you dividends, but the dividends will definitely come.

3) Sell Loosing Stocks ASAP

Sell losing stock

If you lose money on any stocks in a year, it’s best to sell the stocks. You don’t need to be an expert stock trader to know when you are better off selling a stock.

You can always wait until next year to buy the stock again. If you wait for months, you can’t even buy it cheap, as it will most likely be overpriced.

Before selling a stock, try to figure out what the stock market is thinking about it. If you own a stock that’s losing money, it’s best to sell it. You may also be saved by losing more if you hold. You can only hold if the company is fundamentally strong and maintaining profit in their bussiness.

4) Never Miss Dip In Stock

As a rule of thumb, buy high quality companies when the market offers a discount to their fair value. Always keep good stocks on your wishlist and make an eye on it.

The market will punish the stocks if the company has a deteriorating quality. You can easily spot deteriorating quality when the company’s profits start declining, its gross margin gets smaller and smaller, and the stock price gets lower and lower.

The market is discounting a company’s quality. But as long as the company’s earnings don’t fall below the market’s expectations, the stock price shouldn’t move much. You can make solid returns investing in a company that’s deteriorating from a quality perspective, provided you can find a good value at the same time.

You can be smart investor by knowing the factors that determine a company’s quality. When you know these factors, you can easily find companies that will increase their value. The only difficulty is that you need to spend some time studying the companies. You can also buy good stocks cheap by buying more of less valuable companies.

While you wait for a stock price to rise, you can buy dividend stocks that are already paying dividends.

Final Words With Conclusion

Hope you learned some cool idea and steps to become a smart investor. Always invest wisely on a quality place. I hope this article helped you to gain some good knowledge. If you have any doubts or queries please comment them beow.

A dynamic professional with around 22 years’ rich experience in Marketing, Business Development and Business Analysis. But above all, a passionate Capital Market Analyst and option trader for last 20 years with in NSE/ BSE and cryptocurrencies.