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The answer affects
the criteria for
choosing a stock
Stocks of market-leading companies are suitable for this method of earning. They show low but stable growth. This causes reduced risks. In addition, a number of companies can share their profit with you quarterly/annually by paying directly to a brokerage account. This is called dividends.
Pros:
The yield is higher than a dollar deposit.
The safest way to earn money on shares.
Does not require constant monitoring.
You can earn extra from dividends.
You can buy step by step.
An alternative to a private pension fund.
Cons:
Lower risks mean lower returns.
A significant amount is required for significant profit.
In other words, speculation. Leading companies of new growing markets with a high sales rate are suitable for such trade.
Stock selection requires analysis, and successful transactions are made only thanks to strategy. Yes, you will need experience here, so you should start small and not rely on an intuition.
The good news is that hype can bring profit.
Pros:
Higher profitability
Cons:
Higher risks
Takes time
"I have to be lucky at least once" never works. But the analysis works. It helps to choose a share, the moment of purchase and the moment of sale. It's worth googling.
Everything in the market, starting with catastrophes and ending with psychology, has 2 possible outcomes: a rise or fall in price. By studying the price, the volume of trade and demand, it is possible to trace the behavior patterns of stocks. These models may repeat themselves in the future. Such tools as indicators consider indicators. It remains for you to learn to read them and draw conclusions. Technical analysis is the most relevant in trading. You can start with indicators: RSI, MACD, MA, StochRSI, BB
The level of production, growth rates, inflation, innovations - fundamental analysis takes into account many financial and economic factors. Based on this, an assumption is made about how much the stock should cost. If this price is higher than the actual price, you buy it, if it is lower, you take it. Fundamental analysis is relevant in long-term investments.
