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Things to consider before investing in stocks

Things to consider before investing in stocks

Are you interested in investing in stocks? Do you want something measurable, reliable and something that you can count on?

Well, if you are someone eyeing these important factors, wait a minute: stop and assess.

Today, in Canada, America or anywhere across the globe, the choice of investing in stocks is now more than ever. In Canada in particular, with the emergence of companies such as FSD Pharma (OTCPK:FSDDF) (HUGE:CN)(HUGE:CNX), many incredible investment options are emerging on the forefront. New investors today are running to these companies in Canada to direct their resources into something measurable and profitable. FSD Pharma has proven to be an amazing choice of investment in Canada today because it is a company that fits all the points listed below.

Investing in stocks is not about doing “some” research and taking a leap. It’s about a lot more. In fact, before you go ahead with your decision and try to explore this side, note that there are few important things to consider before you dive in.

Five Things To Remember Before Investing In Stocks

1- Make A Financial Plan

Your investing in stocks journey should start with you having a concrete personal financial road map.

Before you go ahead with any decision, sit down, take a deep breath and put it out there as to what you need to have in your financial journey. Write all those things down so that they are clear and obvious.

Figure out your goals. Figure out how much risk you can take or how much risk tolerance you do have.

Investing in stocks doesn’t necessarily mean making money from your investments. However, you will understand the basics once you start somewhere. Making a financial plan is important from that perspective as well.

2- Check Out Quarterly/Annual Earnings Reports

You cannot forget or leave the importance of quarterly or annual earnings reports. Before you invest in any company, you SHOULD and MUST check out the quarterly and annual earnings report of that company.

See:

If it is the business sector you are looking at or the overall offerings, keep an eye on important indicators such as the net income of the company and also the per share earnings etc. These are important indicators to look at of any stock or company to assess whether you should invest or not.

3- Company’s History Is Also Important

Another important thing to consider before investing in stocks is the history of the company.

Examine the earnings history and see if the company has had steady growth in its earnings. Moreover, there are differences in mature and young companies too. It is not necessary that the mature one is better.

4- There Is High Short Term Risk Involved

It is true that stocks are related to risk and they both go hand in hand with one another. However, risk is mostly associated with stocks in general and they come with short-term risks.

These short-term risks are more obvious and dealing with them is a problematic concern, especially if you are new to investing in stocks.

Also note, some investors cannot handle risks, whether short term or long term. Nonetheless, you can handle your short-term risks in more than one possible way and excel at the stock market.

It is something you can get out of yet something that does persist. It is, therefore, important to know its likelihood and possibility too.

5- Index Funds Are Collections Of Different Stocks

In the realm of investing, “funds” are a common phenomenon. NOTE, that index funds are a collection of different stocks. They limit risks because they diversify more. They are safer havens but require the same kind of attention, tolerance or more while handling them.

Yes or no, investing in stocks has become increasingly common today, as people try to look for steady sources of incomes from different sources. Stocks are important and valuable, however, dealing with them requires some careful thought and action.

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