Before buying, develop a list.
Starters: Index are better than Funds.
Before buying company stocks, find companies complying the following criteria:
- At least 10% owned by insiders (insider holdings)
- Sales < 500M $ (Small Caps)
- Daily $ volume from 1 to 25 M $ = stock liquidity = Stocks share Price x Average Daily Trading Volume.
- Share price > 7 $
- Net profit margin >7% (profit / sales)
- Last 12 months relative strength >90 (momentum performance indicatior)
- Earnings & sales growing at least at 25% /year.
- Price to earnings ratio <10.
- Positive cash flow
- In a low market, keep 75% low priced good stocks + 25% safer investments
- High market: 50% stocks + 50% diposits
- Don’t invest in an industry, invest in companies.