Stock Trading Ideas choosing the right stocks for your investment portfolio is the first step to opening the gates to a profitable endeavour in the stock market. Picking stocks that have promising growth prospects can give you a head start in the stock market. Know the demat account meaning and learn how to select the right stocks to invest in. Here is the list of nine stocks of companies you can consider buying for short-term trading and ways in which you can pick the right ones for your portfolio.
You can consider adding these nine stocks to your portfolio:
1. ICICI Prudential
2. Havells India
5. Asian Paints
7. Sun Pharma
8. Wonderla Holidays
9. Ashok Leyland
Every individual invests in the share market with a different goal. For example, young investors prefer to increase their investment portfolio over a longer duration. On the other hand, investors of a higher age bracket usually prefer to opt for capital preservation to have enough holdings when they retire. Another category of investors may want to generate regular income from their investments in the form of dividends. Having said that, there are no predefined rules for setting your investment goals, and you can decide if you want to invest to grow your portfolio or to gain stability of income.
The investment goals help in determining which companies one should consider for investment. If you are looking for income generation, you can consider stocks offering dividends. Investors looking for growth can consider stocks of companies that have strong growth prospects. Open a demat account online to make the investing process simple.
A company’s Stock Trading Ideas make you a part of its ownership. Look for companies whose business you understand. It will help you study how the company is performing. For this, you may consider the companies behind the products and services you use or are familiar with. In this phase, also consider companies that impact you indirectly, like companies that make the drugs for medicines you use regularly. All such companies can give you a starting point to research various sectors and the competitors within one sector.
Once you have considered certain sectors and the competing companies with those sectors, you can start shortening the list. It is crucial to determine the competitive advantage a company has over its competitors and the future of this competitive advantage. Consider factors such as the uniqueness of products, intellectual property, switching costs, etc., when assessing a company’s competitive advantage.
After narrowing down the list of companies you want to consider for an investment, start studying their stock prices. You can evaluate the stock price of a company on various parameters and decide if it has a good value.
For well-established companies having steady growth and profits, one can use the price-to-earnings ratio. You can find Stock Trading Ideas for good prices when their price-to-earnings ratio falls below the historical average. For growth stocks that are not profitable or offer unstable returns, an investor can consider the price-to-sales ratio.
The last step to buying the stocks of a company is to select stocks that are trading reasonably below the fair you have estimated for them. It offers you a margin of safety. Consider a higher margin for growth stocks with unstable returns. Even if the stocks of a company do not move as you expected, your margin of safety will keep you protected because you bought the shares at a lower value.
There is no absolute price and no absolute stock to pick. Time, experience, and research will help you analyse which Stock Trading Ideas you should invest in.