With the stock market hitting its lowest points since 1997 people are both excited and scared. One positive factor of what is happening here is that if you have some capital it might be a great time to go bargain shopping in the stock market. If you take a look around many well trusted and well value stocks are sitting at their 52-week lows on their stock price. If you play the market right you could cash out way ahead!
Look for companies that are well funded, to withstand the recession. You don’t want to invest in a stock that is high in debt and has little capital. Check the financial strength of some companies you are looking to invest in. One thing to look at is the Total Debt / Equity ratio. Ideally you want that ratio to be at or around .50 or less.
A lot of companies right now are not growing in sales and numbers, but ideally what you want to look for is growth and increased earnings. Look at how the company is doing quarter by quarter this year, if they are growing or not. Most stocks will show a major decline, so it will be harder to decide where to invest.
This morning looks like there might be a small rebound after investors seeing a decline over the last 6 days. If you have the extra capital and are patient right now could be a great time to get into the market. Some of the stocks out there are sitting at a great buying opportunity. Just don’t lay your eggs all in one basket and be smart about where you invest. Really educate yourself and research where you want to invest your money before putting into this volatile market.
The greatest investor Warren Buffet puts it best, “be fearful when others are greedy and be greedy only when others are fearful.”
Tuesday, February 24, 2009
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