Make Money In Stocks

Anymore with the recent financial shakeup in the market, everyone seems to be shying away from the stock market worried that their investments are too risky to be sound. However, while it may seem as if the stock market is too shaky to be worth investing in, especially given the fact that many investors are pulling out the market causing it to crumble farther, the truth is that financial crisis is actually one of the best times to get in on the stock market if you make educated decisions.

After all, an investment that has the potential to pay out is much better than a bag of money buried in the backyard that has no chance of ever increasing in value. Although the stock market may seem like it will soon cease to exist, history shows that once the economy recovers the market will as well and stocks will soon skyrocket back to their previous rates. In fact, this trend has been proven over and over again throughout history including during Black Monday, both World Wars, the great depression, natural disasters, and presently terrorist attacks.

The fact is that long term payback of stocks during all of these periods remained consistent and predictable making the stock market a safe place to invest even during the most volatile economic conditions. Unlike many other factors in the financial market, stock can be assigned a tangible value and in many cases the market prices have crashed because they are no longer aligned with the company share value. Buyers that exercise the correct amount of discernment however can discover plenty of bargain deals in terms of the stock market that can produce solid results once the market starts to recover.

Keep in mind also that you should not expect to see profits in just a few weeks if you are truly looking for an investment; if quick results are what you want than trading stocks may be a better choice than investing in the stock market.

In order to do this, you need to step back and evaluate companies that show the potential to prosper in the future. While it is impossible to find a stock that is fall proof, there are certain criteria that can help you identify a great stock investment during a financial crisis. One thing that you should look at is how a company performs in its market now. One that has a dominant control over the market such as Google in the search engine world is a much safer bet since it will be harder for competition to tackle their edge.

Second, you should take a look at their current return on equity. A high return means that the company knows how to invest its money well which means that they will be able to maintain steady generation of profits. Other signs include companies that are international and companies that have rising and consistent dividend payments.

Investing in the stock market is a lot of fun but it also takes a lot of skill. Investing in the over the counter stock market is another beast entirely! Over the counter stocks are generally companies that are much much smaller than a regular publicly traded company on the NASDAQ or the New York Stock Exchange. These companies are very thinly traded, meaning you may not be able to buy or sell the quantity you want on any given day.

Because of this, large sways in prices, both up and down can be completely normal and if you aren’t willing or able to handle the psychological effect this may have on you, you’ve got to seriously reconsider investing in this market. But if you think this is the place for you, I’ve got a few tips to help you evaluate over the counter stocks and I’m going to share them with you in this article today.

First of all, the growth potential of the company is the most important consideration you will ever have, single-handedly. The earnings increases for the company should be at least 10% a year on average for the past six years or else you should stay away from the issue.

Next look at the cash, investments, and accounts receivable as well as the materials and inventories for the company. These things should normally be at least twice the size of the liabilities that are due within the next year for the company. This is because smaller companies need a larger cushion to weather all storms.

Next take a look at working capital per share. For over the counter companies the working capital per share should be larger than the market value of the stock. For instance, a $12 stock should be backed by a good solid $14 per share in working capital; at least.

Next, the company should be owned by at least 10 institutional investors as reported in the S&P Stock guide. This may be hard for many OTC stocks but it is important nonetheless.

Next look at the balance sheet for the company. It shouldn’t show any deferred operating expenses at all.

Next look at who also owns the stock. You want to look for public ownership that is between 500,000 and 1 million shares of stock. A good indicator is that no more than 10% of the company is controlled by a single individual or institution.

Next look at recent dividends or at recent stock splits. What happened after the dividends were issued? Did the price of the stock continued to increase or did it drop? Increase suggests that the company is financially solid and it’s investors feel strongly about it. A decrease suggests that insiders are cashing out and running away… which is a horrible sign and a clear indicator to stay away.

Finding a good over the counter stock can be a lot of work but at the same time it can be incredibly rewarding because all it takes is a few of these gems to be uncovered in order to make you a lot of money very quickly!