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How to Buy Stocks That Are Good And Cheap

By Edited Nov 13, 2013 0 0

If you are an investor, whether new or not, you would want to buy cheap stocks in the world of commerce and earn more from them. Sometimes, investors may doubt when they are cheap to buy because these might belong to a company involved in a bad situation with poor management, slow sales growth, low earnings and declining market shares. 

These are negative aspects for any stock to obtain and you should avoid them even how cheap they are. Only buy them when they are cheap but when they also have a steady growth because they will have the good advantage to bring more profits in the long run. Buying them cheap with a steady growth will give you additional income that you wouldn't even imagine. Below are some guidelines to help you buy the stock that are not only cheap but also good:

Difficulty:
 
Moderately Challenging

Instructions

things you'll need:

  • Brokerage account
  • Time to research
  • Money for transactions
  • World of commerce tools
  • Patience and perseverance
    • 1

      Buy micro cap stocks also known as penny stocks. Check out a good number of them through trading softwares in order to analyze charts thousands of them so that you can save a lot of time looking for them while their cheap and good online. As an investor, whether new or not, you can learn how to buy them good and cheap in no time if you have an effective trading software.

    • 2

      Buy these stocks from companies that are well-known and has a good track record. Try to look for the consistent sales and equity whether it is good. You also need to look at their earnings per share (EPS) and free cash flow growth rate. Study its history whether it has a good ROIC (Return On Invested Capital), this is a calculation used to measure out a company's efficiency at assigning and dividing their controlled capital for profitable investments.

    • 3

      Do not buy stocks from businesses that you don't like or don't even understand. If you are assessing it, picture yourself as the co-owner of the business and not the typical investor who's main concern is only to buy them cheap and profit from them. When you believe about the company's achievements and you are also equipped with sufficient information with regards to their business then you'll be able to assess the reasons why the company's stocks are cheap and good. 

      For example, they might be expanding their business internationally so therefore they're having a big growth in the market share. Another example is, if the company have a solid balance sheet. Try to check what are the challenges faced by the company with the recent economic situation.

    • 4

      Buy cheap stocks from companies with outstanding CEOs who are known for their integrity, honesty and good management. Confident CEOs know where their company is headed and they can clearly explain their current situation. There are good company managers who really know how to successfully redistribute and utilize cash and make huge earnings. These are important factors to consider if you want to buy  them cheap and good online and profit from them.

Tips & Warnings

  • Good and wise investors know how to research what kind of cheap stocks that they're going to buy so that they won't lose money for just buying them cheap. Trading stocks online can truly give you fast money if you buy them cheap and knowing that they are valuable too. It is also advisable to select the right online broker that you think is the best for your trading investment. There are several online brokers available in the market like Etrade.com, Sharebuilder.com and Scottrade.com.

  • Some investors have more than one online trading account so it's also a good idea to have several tools. You may also buy a stock market trading software when you want to buy and sell them later.

    You may need a good software or program which is totally devoted for tracking down those best-performing cheap and valuable stocks while they are still available since there are several programs that are dedicated generally at the whole world of commerce whereas other softwares or programs are mainly focused or they only specialized in penny stocks. 

    You could multiply your investments for example through penny stocks alone. As long as you can pick them worthy and cheap, it can truly provide you a good investment. So if you had a specialiazed penny stock program and can pick a couple of shares initially valued very low, let us say for example 10 cents then by the end of that first market day it had climbed up to 60-80 cents a share then this is a very good investment. 

    So for a new investor who has never had much experience with investments like this then it could really be truly good and cheap. This is only an example in order to surge your investment value but you also need to be careful because buying them could be addictive in some ways especially if you're new to it and then suddenly may bankcrupt you.

  • Don't be confused why a well-known company has a stock that is really cheap to buy at the moment, kind of like a sale or a great deal. In some cases, these will be on the market for a very short period of time only so it is good to buy them earlier from these trusted companies before it gets too expensive to buy them later on. If you have no online trading account yet, it is easy to open one especially if you have extra money to fund it.

  • Trading stocks online can be profitable if you have the right tools, time to research, goals and luck. You also need to look and wait for a good and cheap price for them when you plan buying so that you can gain more cash when you sell them. You can become a successful investor in the world of commerce if you have the interest and the will to do it. Good luck!



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