In addition to factors such as skills and trading strategies, a good selection of stocks helps investors achieve successful buy/sell trades. However, finding a good stock is not easy, especially for beginners. To understand how to choose the stocks in which to invest effectively on the eToro platform, follow the article below.
Criteria for the selection of titles
In fact, not everyone knows how to choose good stocks to invest ineffectively.
In order to be able to choose a suitable stock code, you should carefully study the information about companies that issue shares according to the following criteria:
- First, the quality criteria of the enterprise, business results and good profit give way to the tendency of enterprises to make profits.
- Second, the strength of the company’s earning power at certain times is crucial in investment decision-making. If in times of economic hardship and decline, the company’s profits are still maintained, proving that this is a business that is worth considering for its investment strategy.
- Thirdly, dividend criteria must also be considered, perhaps the dividend distribution ratio is not high, but it must be stable and maintained uninterruptedly for many years. This can be a key factor that reflects stability in the enterprise’s business operations.
- Finally, the quality of the company’s assets is always what interests investors, especially the source of short-term investments. Even if the company’s activity goes down, the good quality resources that the company possesses must be carefully studied. The products created by the enterprise are a solid basis for the development of the company in the future.
eToro Stock Investment Guide
After choosing a good stock code, you need to choose a broker for yourself. Among the thousands of brokers today, eToro is considered one of the most reliable exchanges, the first choice of stock traders. With a friendly interface, investors can easily execute international securities trading orders. After opening an eToro account, you can invest in stocks as follows:
Learn the basics of a stock ticker on eToro
When you open a stock ticker, you see some basic information about that ticker and 4 tabs: Feed, Statistics, Charts, Research.
Top left corner: Basic stock ticker information is shown here, including:
- Company name, stock code
- Current stock ticker price
- Information about the pricing provider, price unit, current status of the transaction.
- Information column on the right: Provides basic information about the stock code.
- Information, investment ideas, comments on this stock code are published by investors.
- You can also create a new post to share on this code or share it on other social networks here.
- The most important parameters to know about a ticker and his activity include the price of the last close, market capitalization, intraday volatility, stock multiplier on earnings, 52-week price range, revenue, average volume, earnings per share, one-year return on investment, the dividend yield on the share price.
- Universal time graph
- Basic information about the company: area of activity, line of business, name of the executive director, number of employees.
In addition, at the bottom, there is a financial summary and the profile of the asset to which investors can refer.
Here you can view past and current price history, monitor stock charts on different time frames in real time, set the appearance of the chart to your liking, and add indicators. Technical reports, providing graphical tools…
Research: Research: Lists in detail all the recommendations and expert advice for a given security (buy, sell or hold) and their specific estimates for the price range of that asset (Note: For the search function, investors can only use it after depositing money into the account).
How to choose stocks to invest on eToro
After knowing how to choose the stocks to invest in and discovering the right stock code yourself, you can proceed to invest/ buy shares according to the following instructions:
Step 1: After selecting the stock exchange code, click on the “Trade” button
Step 2: Enter the amount you want to invest, the volume of shares to buy, then make a stop loss and take a profit order for your trade
Step 3: After finishing setting the transaction parameters, click the “Set Order” button to submit an order to open a trade. A window will appear confirming the transaction information you have opened and when the processing is complete
Then you have completed an order to buy shares. Now you can return to the “Wallet” section of the main menu bar to review and see the stocks that have appeared in your portfolio.
Benefits of investing in stocks
Companies sell a stock because it’s a good way to get huge amounts of financial capital. However, the company itself has to generate a lot of revenue to make it valuable. Issuing an initial public offering is very expensive. Then there is no privacy, as investors review the profitability and strategy of the company every quarter. Companies have another way to obtain financing is through personal loans or private investors, or through bonds, which are publicly traded loans. The advantage of stocks over bonds is that a security does not require monthly interest payments.
Individuals use equity investments to enter the market because returns far outweigh other investments, such as bonds or commodities. Investing in stocks is a great way to ensure that your investments outperform inflation.