Investing in the stock market need precision in selecting a portfolio of stocks that can provide gains for investors. How to select the most ideal?
Here are four simple tips choose the ideal stock portfolio:
1. Return on Equity (ROE):
Should choose stocks that have high levels of return on equity (ROE) over the cost to borrow from the bank to do business. For example, if the loan interest of banks by 11%, the ROE selected stocks should be higher than that.
Fund Manager to take steps more complex, which is looking ROE higher share of ROE issuers in the capital market and the stock price index.
2. Debt to Equity Ratio (ROE):
Mimic the way a stock investment style Sharia law, which has no issuer with high debt or debt-to-equity ratio is more than twice the size, can also reduce the risk of investment.
However, along with the stock changing world circumstances, if the issuer looks will make clear corporate actions, to reduce debt, it can be made an exception.
3. Positive Earnings (look for profit company)
We recommend that you choose a company with positive earnings growth and avoid the loss company or companies that have negative earnings.
4. Capitalization large and liquid (heavily traded)
Stocks that can be selected for instance issuers belonging LQ45, or active stocks and not a stock to sleep. Shares of large market capitalization issuers or blue chip usually recommended.
Source pict: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2013/04/17/4-tips-for-choosing-the-right-etfs-for-you