Stock Investment Tips Worth Knowing
Seasoned investors research many aspects of a stock prior to making a purchase decision. Certainly, useful information includes historical stock performance, especially during economic downturns, but, of equal importance, it also includes analysis of the financial statements of the particular corporation under consideration.
Effective analysis is time-consuming, and it requires analytical expertise that the majority of investors lack. Many keep abreast of their investment holdings by monitoring stock ratings provided by rating firms. In this manner, investors can access valuable information that is compiled by experienced stock and financial analysts. These ratings are more than mere stock investment tips. Rather, they are based on sound financial methodologies. These firms provide current, historical and continuing information on the Internet for a reasonable annual subscription.
Financial rating companies have access to data that would be difficult for an individual investor to compile and analyze alone. Weiss Ratings, for example, prepares quarterly ratings on the strength of 17,000 banks, credit unions and insurance companies. With respect to stocks and other securities, it evaluates about 12,000 publicly traded securities on a daily basis.Independence is one important advantage of subscribing to a rating service. Often, an investment advisor has a vested interest in selling a particular security or mutual fund. Rating services are completely independent from the companies and securities that they rate. This independence assures consumers that the provided information is reliable and unbiased.Even the most risk-tolerant investor requires some measure of safety when investing in the stock market.
The safety factor increases when investing in securities that have been highly rated based on sound analyses. Weiss Ratings assessed the 10-year performance of almost every stock that was trading on U.S. markets beginning in 2001. Stocks with an “A” rating in 2001 outperformed the market over the following 10 years. These A-rated stocks weathered both bull and bear markets. On average, they earned 20 percent annually with dividends being reinvested. Over the 10-year period, the total yield of the A-rated stocks was 199 percent compared with the 49 percent return of the Standard and Poor’s 500 Index. Access to these ratings is available on the Weiss Watchdog website and also on Jim Cramer’s website, TheStreet.Investors who subscribe to ethical, independent rating services have at their fingertips a wealth of sound data that is based on financial fundamentals and technical factors. A-rated stocks are those of publicly traded companies having solid balance sheets and income statements as well as consistent returns through varying economic conditions.
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Category: Investing
