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What are the Best Stocks to Buy?
I suppose I could rattle off a few of the different stocks that I own right now, and call them a ‘best stocks to buy’ list, by way of opinion, of course. I won’t do that. What I will do however, is show you the exact process I go through when deciding whether I want to buy stock or not in any given situation. My thought process is usually quite simple, and doesn’t vary too much. I can’t predict the future either, but I don’t think it will change for quite some time, if ever. The reason for that is because I truly believe in one way of buying stocks, especially if you are doing this for the long term.
Long term is a good phrase to end on when talking about the best stocks to buy, because that is what I focus on. Let me start by saying that what I do in no way resembles the idea of ‘day trading’ or the way some people will buy penny stocks in order to take quick advantage of small fluctuations in price. I am in this for the long-haul and want to buy stocks that are going to appreciate over time. In my opinion, these stocks are those that come from well established companies that for whatever reason, at the time of purchase are under-valued; trading for much less than I think the company is worth. Remember that a stock’s price will rise and fall in value NOT based on a company’s value or performance, but whether people are currently mostly buying or selling that stock. When people are very bearish on a stock that to me seems like a good company that is only going up and up, I feel I have a winner.
The answer to how to buy stocks lies not in ‘how’ so much as ‘when’. When I find a company like the ones mentioned above, I like to buy on dips. Those are the exact moments when I feel like the company is under-valued, and will continue to go up in price over time. The only other criterion I will really focus on is dividends. I like to see a company that will pay me a good dividend; one that I will reinvest of course, for further compounding effect. For me, that is all there is to stock buying. The question of what stocks to buy should really be what kind of stocks to buy, and that is my answer. I like to buy stocks online in this fashion for the simple reason that I can know that I am adding to my ever-increasing portfolio, from the comfort of my own home, and at a relatively good price, seeing as buying stocks online costs no more than a few dollars per trade.