As a first step to venture into this type of investment is necessary to select a portfolio of companies with good prospects of performance and conduct a health study of them, which includes the analysis of the accounts (the listed companies are public) noting their historical performance loss, earnings, gross margin, balance and cash flows.

It is also necessary to consider matters relating to the operational status of the selected companies, this includes the present and the commitments that may arise in the future. The rule to follow is to avoid high-risk investments unless they have significant surplus to assume the additional uncertainty. It is recommended to look for companies with a business model could not easily be replicated at lower cost and higher quality, since these factors determine a company to be sustainable in the long term. To find this competitive advantage is constantly necessary to observe all the above factors of the companies in our interest.

To avoid unpleasant experiences or repeat mistakes that other investors have already committed, you should follow these steps:

1 – Think about the amount you can invest at risk: We must be aware of the risks involved in this type of investment, understand that they can be productive but also cause partial or total loss of our capital. It is not advisable to invest what we need in case of an emergency.

2 – Set goals: Be clear what you want to achieve in relation to costs, profitability and risk. Reasonable and numerical goal-setting, i.e. a profit percentage of the money invested in a certain period of time. Observe the way in overall market but focus on return on money put into play the selected companies.

3 – Invest in the long term: In this context, it should analyze the expectations of long-term return well aware of this factor when carrying out operations and thus acquire shares of companies that meet that goal. In this investment tool is not recommended to operate in the short term, as it will increase the number of transaction fees and therefore the benefit will be reduced.

4 – Interpret financial information and a business environment: Information is power, and more if the bag is put into play where the real value of each company. Thus, market, financial reports and all sorts of data about not only business but also in macroeconomic indicators and the sector where they operate, will be the basis for making decisions when buying or selling shares.

5 – Buy shares of companies known: It is important to invest in companies rather than securities and for that we need all the information possible about the company’s interest. This means being aware of news that may affect the sector in which it operates, as well as knowing how to interpret the financial situation of the same, that is why it makes money and what you can do so in the future. Obviously also know the competition and future prospects of the entire environment.

The best known are actions which in most cases have all the information you need to be aware of it. But companies registered in the stock market should keep public clarity in its operation, are often not the focus of media attention, so the news does not flow the same way as in the case of the most popular.

This deep knowledge offers multiple benefits, including the most important is the purchase titles at reasonable prices or adequate. Making a special point on stock prices, it must be noted that the cost often is not the essential part to consider is not relevant that the monetary value of the action, but the return it offers. Clearly, always seek the best price for the expected utility.

Also usually large firms are the most popular, so it becomes easier and safer to bet on large companies.

6 – Diversifying the investment is advisable to have a clear need to diversify the portfolio to minimize the risks assumed. It is relatively easy for a sector or company suffered falls, but do so three or four different simultaneously. It is recommended to diversify to the extent of the availability of capital. Normally investigating 20 companies will end with a portfolio consisting of eight or five of the best investment opportunities.

8 – Use a strategy put forward a strategy that considers all the above factors, no simple task, requiring much research. On the Internet there are lots of forums, specialized websites and blogs where we share values and data on different types of advice given, however always advisable to be cautious with the information you provide us with sources, and best, if not have the knowledge and experience to venture into this activity will be the personalized advice of an expert.

9 – Follow the trend we begin to operate in a market worth investing in favor of a trend. The stock prices move according to certain patterns, some are easily identified and others are more difficult to detect, since these changes can be made in years, but is always advisable to note as future projects. At this point you should be patient before venturing to identify a trend change and make decisions on the sale or purchase.

10 – Flush gains and losses shorten Most investors are likely to sell to earn a 10% to do when they lose 1%. In this regard we should remember the goal we set in terms of maximum losses and gains, especially as regards the period and act accordingly. The first thing an investor learns is to curb losses, i.e. to establish the level that is willing to take and from which will be automatically sold the shares.

We believe that complying with these suggestions is not easy for the novice investor, so we recommend in case of doubt seek help from an investment professional advice.

We specify that this article does not imply any recommendation or advice to invest; their only purpose is to introduce our readers to the issue of investment in business.

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