Share Trading In Usa - 4 Simple Steps to Picking Safe Stocks or Shares to Purchase

Share Trading In Usa

Don't know what stocks to buy? Don't know when to buy them? When buying stocks the first few trades can be intimidating. If you follow just a few simple steps you can rest easy that you've purchased a lucrative stock. The colossal error most people made during the Global Financial Crisis was selling their stocks when they started to fall in price. Most Australian stocks are trading now close to what they were preceding the GFC so if you had of held them you could be close to where you were back when they started to drop.

These steps are going to help you pick stocks that are relatively sound, the companies have the least risk of bankruptcy but won't provide you with exceptional capital gains, so they are 'safe stocks' that over the longer term should provide you with dependable gains.

Step 1. Getting Started

It can sometimes be baffling to know where to start when stock picking. The best place to start is by finding a 'margin lending approved securities list', the easiest way to do this is a Google search. The reason for this is that this is the list of securities/stocks the banks are willing to lend you money for, if the bank is willing to lend you money on these stocks that should indicate the are secure. Share Trading In Usa

Step 2. Narrowing Down Your List

Your approved securities list should have a column that is either gearing ratio or LVR. The higher the LVR or ratio the more the bank is willing to lend you. The higher the percentage the safer the stock. Highlight all stocks over 70%. This should leave you with around 20 to 40 to pick from.

Step 3. S&P

Next, locate the Standard & Poors listing of stocks for your country, in Australia you are looking for S&P/ASX200, in the USA you are looking for the S&P 500. If any of the stocks on your list are not on this list cross them off. In Australia these stocks are classified as blue-chip company stocks and are considered the safest to purchase as they are big companies that provide consistent returns.

Step 4. Dividends

The last step, go through the leftover stocks on your list, which ones pay dividends? Mark off each stock on your list that pays dividends, you may even wish to compare which stocks are paying higher dividends as past dividends give an indication as to what the future dividends will be.

So there you have it 4 simple steps to picking safe shares/stocks to purchase. Share Trading In Usa

Share Trading In Usa - 4 Simple Steps to Picking Safe Stocks or Shares to Purchase

By: Trading Expert

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