The defensive investor how to choose a company for investing
The defensive investor chose a company for investing why I
choose this content because this is the most important factor for all beginner
defensive investors, so I thought I wanted to share something about this with you.
The defensive investor has to choose the best company for their investment then
only those returns will good. So, the defensive investor requires more
financial knowledge he wants to make some good decisions in their investment so
if you are a beginner investor in the stock market you have to learn some
lessons from, you’re investing journey. The defensive investors always safe
players because they will not take more risks in their investing and defensive
investors will not spend more time analyzing the share market These are the
main characteristics of these investors. Most beginner investors buying shares
on considered share price this mistake doing most beginners if you’re going to
buy a share you have to keep in mind this. Every investor needs good financial
knowledge the only he can make good decisions in their investing. Here the
investor has to decide which company’s shares have to buy that share how will
make profits like that. so, if you are a beginner defensive investor you must
improve, you’re financial knowledge you can choose many sources to improve your
knowledge you have to use those opportunities like financial-related books,
podcasts, financial news, websites, etc. Here have many opportunities you have
to use that properly. Before investing in companies you have to analyze that
companies’ financial situation, future, asset value, etc. every defensive
investor has to understand the technotes of investing’s that skill has to
improve all investors that are the most important thing. The defensive investor
has to prepare psychologically and financially after investing because the
share market contains some risks so you have to manage that then only you can
survive.
Industry analyzing how much important for an investor
The investor has to analyze the company's annual reports and other
documents carefully to read especially you have to check any margin and
acquisitions that have happened in that company because you’re going to invest
in that companies, so any kind of issues will affect you too. So, you have to
more conscious before investing keep in mind that. You have to analyze how the company makes the cash you can find in the cash flow statement.
Cash flow statement analyzing how much important for an investor
Cash flow statement analysis is the most important one for all investors
because then only you can understand that companies’ income sources. The cash
flow statement has three heads
1.
Financing activity
2.
Investing activity
3.
Operating activity.
1.Financing activity
Here you can find all the income sources of the company.
2.
Investing activity
Here you can find all the investing sources of companies like
shares, bonds, etc.
3.
Operating activity
This is the most important part for analyzing why because here you can
find the asset value, exactly this is the income-generating source so you have
to more conscious here.
These are the benefits of analyzing cash flow if you’re a beginner
investor, you must analyze these statements before investing.
Quality management
The management of the company should have to qualify this has to analyze
all investors. You're chosen company’s share value goes higher suddenly have to
attain from that company because there have more chances for loss. And you're
shortlisted company should concentrate on the business not to share value if
that company giving more important for shares you have to avoid that company
that is the best choice.
How to choose the company by using earnings per share.
if you analyze EPS (Earnings per share) you have to analyze at least 5-7
years value because long-term analyzing is always a good thing. You have to
choose a company then you have to analyze those annual reports and must
calculate EPS this is the process; all defensive investors have to do this
process properly. Eps values will fluctuate always so you have to understand
that’s a trend.
How to compare the companies
The defensive investor has to compare the companies before investing by
using some factors like profitability, stability, earnings, growth, financial
position, dividends, price history. Then you can choose which company is best
for investing.
Conclusion
The defensive investor has to analyze the company, before going to
invest. Have to analyze company financial potion, asset value, companies’
future, etc. When the investor has done their job properly, he can become a
success in the future.
This knowledge I gather from The intelligent investor book by Benjamin
graham bell
I hope this article will give you 100% contentment
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