Bear These Questions in Mind to Clear up any “Bull” in the Market: Top Questions to Ask When Trading Shares

We all work hard for our cabbage and do not want to see it wasted. The fear of investment loss prevents millions from ever trading. The risk is perceived as too high, and lower-yield investments garner their attention. We should all set our thresholds when investing. That is intelligent.

Being well informed for any decision is a strong foundation from which to build. The breath of your study should encompass casual inquisitive conversation with family, friends, or peers. Schedule an appointment with some brokers. Meeting with a true professional for a better understanding should be a free service.

Below is a list of more pointers and questions to ask all the mentioned vectors of influence on your investment decision.

  • You should know something about trading shares. Choose companies to invest in from familiar markets and sectors. You will understand the consistency of growth, or withering of companies in aviation if you are involved in aircraft maintenance or management. That is market knowledge. What is the market? What is the company all about?
  • What are the cap and moat?
    • The cap is the total value of the company based on shares. It is not a sign of financial power. The market cap is the total industry value. A company with a large market share has little room for growth without industry change.
    • The moat of investments is a form of insurance, not unlike a castle. Company insurance such as intellectual property protects investors until it is superseded.
  • This question is for you again. Is your purpose with this investment, dividend, or capital growth related? Do you want passive income or a quick return? Both together are a fairytale, be leary of such stories.
  • How profitable is the company? What is their historic execution? What was their cap? Market and company cap we covered earlier.
  • Any investment recommendations you receive look for their sales and revenues. How do they compare to industry peers?
  • You and I are judged as investors and consumers on our credit score. Do your research and find the “credit score” of your future investments by looking into their past. How are their earnings?
  • The P/E ratio is used to compare companies for today’s and past ratios. The price-to-earnings ratio is the Price you pay juxtaposed against the historic Earnings.
  • What are the fees associated with the broker and investment? Get it all on the table for clarity and confidence in your decision. A modest yield investment with low fees can be more profitable than a high yield with high fees.
  • Finally, today’s technology can provide us with direct customer feedback. In moments you can research past performance and customer satisfaction.

Remember, market volatility can produce profits in both directions for intelligent, informed, educated professionals, who have decades of relationships in the industry, not everyone. Be humble enough to admit your skill level and shrewd enough to get to know the broker you entrust.