Key success factors and investment skills

Investors who analyze the company can better judge the value of the stock and profit from buying and selling it. Your greatest asset in stock investing is knowledge (and a little common sense). To succeed in the world of stock investing, keep in mind these key success factors:

• Analyze yourself. What do you want to accomplish with your stock investing? What are your investment goals?

• Know where to get information. The decisions you make about your money and what stocks to invest in require quality information.

• Understand why you want to invest in stocks. Are you seeking appreciation (capital gains) or income (dividends)?

• Do some research. Look at the company whose stock you’re considering to see whether it’s a profitable company worthy of your investment dollars.

• Choosing a winning stock also means that you choose a winning industry. You’ll frequently see stock prices of mediocre companies in “hot” industries rise higher and faster than solid companies in floundering industries. Therefore, choosing the industry is very important.

• Understand how the world affects your stock. Stocks succeed or fail in large part due to the environment in which they operate. Economics and politics make up that world, so you should know something about them.

• Understand and identify megatrends. Doing so makes it easier for you to make money. This edition spends more time and provides more resources helping you see the opportunities in emerging sectors and even avoid the problem areas.

• Use investing strategies like the pros do. In other words, how you go about investing can be just as important as what you invest in.

• Keep more of the money you earn. After all your great work in getting the right stocks and making the big bucks, you should know about keeping more of the fruits of your investing.

Sometimes, what people tell you to do with stocks is not as revealing as what people are actually doing. This is why I like to look at company insiders before I buy or sell that particular stock.