4 things to Look for Before Investing in the Stock Market
It can be difficult to choose which stocks to purchase. So before you make a move it is wise to do some research and rely on someone who is knowledgeable about investing in stocks. Another smart move would be to learn as much as you possibly can along the way in stock investing.
To do this, you first need to do a Financial Health Check on the company you will like to invest in. The most common tool that can be used in Financial Ratios means measuring the relationships between two or more components on a company’s financial statement for example:
- Profit vs Sales
- Asset vs Liabilities
4 things to look for before investing in a company in the Stock Market
Financial Ratios generally fall into 4 Categories:
Profitability – how good a company is at making money?
Liquidity – the ease at which a company can pay off the money it owes without having to borrow money.
Severance – have death the company is using to run the company
Valuation ratio – used by investors to determine if the company’s stock is overvalued or undervalued
Important Questions to Ask before investing in a Stock.
- Is the company making money?
- Do they have enough cash?
- Are they managing their death levels appropriately?
- Is their stock fairly priced?
These are some key questions to answer before investing in a stock.
How does someone from Trinidad and Tobago or the Caribbean invest in the United States (US) Stock Market?
For a person in the Caribbean such as Trinidad and Tobago, Jamaica, Barbados, Grenada, St Lucia, or St. Kitts who would like to invest in the US (United States) stock market, you would first need to create an international brokerage account. A popularly known brokerage account platform for people/ persons living in the Caribbean is Interactive Brokers (IBKR).
For persons in Trinidad and Tobago and from the Caribbean Islands who are interested in investing in the United States (US) stock market, you can do so by going to the interactivebrokers.com website and signing up for an account. Once you reach the website, Click on the button “Open Account” in the top right-hand corner to get started.