While investing in stocks and bonds is a smart and effective way to both amplify and diversify your portfolio, picking good stocks & bonds can be a bit tricky and one needs to be careful. Smart investing is a great way to reduce overall risk and at the same time increase your chances of earning rather than losing money. The following tips and steps should help you make that process easier to understand.
It is always a good idea to find a company whose niches are hot and in demand. Such companies can produce fantastic results within a few months of owning the stock. A perfect example is Apple and the tremendous success it has had with its iPhone and iPod. Apple, as most can recall was once close to bankruptcy and today, with the success of it's iPhone,its developments of the iMac and iPod has become a solid investment and made those who invested in 8 months ago huge profits.
Be sure to find a stock when it's at its lowest price. Find out all you can about the stock and keep your eye on recent trends within that particular product market. In case another company may want to buy out a smaller company, they will offer a premium price per share. This means if you own some of that stock, you will make a lot of money on that deal.
Always pay close attention to the ethics of a company you may invest in. If during your search you find that the company has been sued a lot, it will mean they're an unethical and misguided. This may cause the price of the stock to drop.
Choosing good bonds
Anyone could tell you that Bonds are a much safer investment than stocks. One of the safest options to pick are those backed by the United States Government. While they don't pay any interest on what you originally invested, when the bond matures, you do get the principle back and the full value of the bond as well. This usually means the value of the bond is double what you paid for. Some bonds offer different returns than others.
Be sure to diversify your bonds. This will generate interest from several accounts. The benefits for this are twofold. For one, consistent flow of income is provided which allows you to invest again. Second, and more importantly, in case a company defaults causing you not to get all your principle back, you will still have other bonds in your portfolio yielding interest; meaning you will still see some return gained.
While considering corporate bonds, which pay you interest at the end of each year, be sure to closely monitor the company's extended goals. This will help you determine if they will be around for some time. When deciding on a company be sure to know the products they are offering. You don't want to invest in a product fad that will die out after 8 months. Keep in mind how much debt the company has since the more money they have in the bank (liquidity) the stronger they will be financially. However, the problem with it having too much debt is that it runs the danger of defaulting. Keep an eye out for scandals that could affect the company. Some times these scandals lead to huge fines being levied against them which can easily drive the company to fail.
"Tips on how to pick stocks and bonds".
1. Get correct data of daily business of each company for a few days.
2. Consult the expert in the field.
3. Get advice from your sincere friends.
4. Avoid greed and haste.
5. Start doing some business other than such investments if skill, time , money and trend is available.
6. Remember the Creator who blessed with health and wealth.
May God bless all everywhere.
by HarshitG5 years ago
Hey,As many would be aware of that stock market is one of better way to invest and reap benefits from . So what i want to know is do you guys really invest in Stock market or stick with Fixed deposits and bank interest...
by thecollecktor6 years ago
It is my intent to discover the formula for investing in penny stocks that goes beyond the hype currently being used. What criteria do you use?
by alexd1817 years ago
I'm looking for some advice from anyone who has done investing or personal finance planning before. If you had a 5-figure sum of money and wanted to grow that amount into more what would be the best way to utilize it?...
by Arian Won8 years ago
I know the stock market is bad, but I'd like to start investing as I know there are a lot of great bargains out there. So if anyone can recommend any published books that they have read themselves, I would appreciate it.
by Stacie L6 years ago
Many folk are worried about the stock markets now and won't invest. is this making matters worse? or is it the best time to invest?
by Ramsa15 years ago
In my latest Hub written and posted a day before Facebook went public, I gave five reasons why I would not buy FB stock. And in one of my comments I predicted that the stock would be at around $25 in six months. Well,...
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