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Data:2009-12-12 2:34
Here is a good investment, I recommend five principles:
1. Do your homework;
This means that to play a right understanding of accounting in order to facilitate their decision-making in which a company can know exactly what the financial situation.
2. To find a company with a strong competitive advantage;
Competitive advantage can protect a small part of the company for many years to maintain above-average profit margins, these companies are often the best long-term investments. To maintain the rate of excess profits the longer the stock performance of long-term investment, the better.
3. Has a margin of safety;
Found a good company completed only half of the investment process, and the other half is to assess the value of the company. This is a huge margin of safety? To have a strong competitive advantage in the stability of the company's 20%, and no competitive advantage in high-risk companies is 60%, and most companies require a 30% --- 40% margin of safety.
4. Long-term holding;
If you frequent trading, as time goes by, do not segment commissions and other fees paid by a composite growth.
5. To know when to sell;
Do not sell simply because stock prices up or down, after careful analysis, should be sold if the following happens: when you first bought made a mistake; company's fundamentals have deteriorated; stock price has already exceeded its intrinsic value of many of ; you have found a better investment opportunities; stock portfolios in your account for a disproportionate proportion.