Sunday, January 8, 2012
Stock Selection Factors
So, you want to start buying stocks. What criteria should you follow to decide which investments are right for you? According to Kiplinger's magazine, here's what to consider.
1. Price versus earnings--- Look at the price to earnings ratio to decide.
2. Growth of the company--- Future growth is essential more than past growth.
3. Dividends--- Does it pay a dividend and has it been going up or down? Some of the highest dividend yields right now are paid out by Merck (MRK) at 4.4%, AT&T (T) at 5.9% and Verizon (VZ) at 5.2%.
4. Cash flow--- Does it have enough money coming in to pay dividends and debts?
5. Industry trends--- What does that industry or sector look like overall? Is it thriving or struggling?
6. Governance--- Is there a board governing what happens at the company?
Here's a link to the article: