What Are The Things You Should Do As An Investor?

Stock Investment is a serious business. There is no such thing as putting your money into a company and think that if someday you will hit the jackpot. In this world, there is no free lunch. You should, at the minimum, do the below:

Attend Annual General Meeting
After buying the stock of a company, you as a shareholder have the right to attend the Annual General Meeting. Be there and listen to what the management has to say about the performance and prospect of the company.

If there is anything you wish to highlight or clarify, raise your hand and voice it out during the Question & Answer session. It is a very good opportunity to find out who are the people managing the company. Makes you feel a whole lot confident with the company.

However, do not fully agree with what the management has presented in front of your eyes. Use it as a second opinion to decide if you should continue to invest with the company. Remember, if the company wants you to continue invest your money with them, they will always tell you what you like to hear. No management will stand up there and say, “Sell the stock!”

Get Clarification From The Company

As a shareholder, you have every right to question the company, if you feel  something that is not in favour of investors.

For example, if the company is in the business of Information Technology, all of a sudden it announces that it is going into the business of setting up supermarket store.

Investor should write in or email your concern or queries. The company will have to reply you accordingly.

Again, if the company wants you to continue invest your money with them, they will tell you what you like to hear. Use it as a second opinion and decide if you should continue to invest with them.

Read Related News Every Day

Use the search engine and do a quick search of the company’s news every day. You need to know if there are any big incidents that could have happened. For example, there could be sudden news of some accounting scandal expose by the authority. This will seriously affect the share price of the stock.

Check The Stock Price Every Day

You don’t want to get a sudden shock one week later after realizing that the share price has dropped significantly due to whatever reason. Check the price every day, so you are able to react as soon as possible.

Valuate The Company Every Quarter

Evaluate the share price of the company after analysing the annual report every quarter. You can decide to keep the stock if you think the share price is undervalued, be very watchful if you think the share price is a lot overvalued.

Check If Insiders and Financial Institutions Are Buying Or Selling The Stock

Public information is available as who are the insiders of the company or Financial Institutions buying or selling the stock. Be very watchful if there is a heavy selling.

Read Analyst’s Report Who Has Reviewed The Company

Analyst has all the time in the world to analyse and review the company. Read their reports to find out more about the company. However, do not fully agree with what the analyst has to say. After all they are just people like you and I, you could have seen things that they do not see. Use it as second opinion.

However, be very careful if there is a high average number of “Sell” rating by different analysts.

 

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