If you’re in for the long-term you should ask yourself if you feel related to the company you are investing in. Before jumping in to the action you should ask yourself some questions first.
- Do you believe in the product they are selling? Would you buy it?
- Do you think the company has an innovative spirit or they are only looking in the present?
This are not some Guru-like advices, they are important because they describe your preferences, and doing so the preferences of many people similar to you.
So, before even start looking for more particular information about a stock you must ask yourself What kind of products do I buy? What services do I use?
A company with consumers is a healthy company, almost all the time.
Then you must focus in the long-term, maybe not decades but at least a couple months or years. Renowned companies usually do not give high growth, but they are more stable.
If you are looking for big returns, then you should look for younger and smaller projects.
Also, consider your experience when finding a stock to invest in. Use your life experience, your work experience and your friends’ networks to know more about a certain industry before making an investment.
After doing all that, you must check if the company is either big or has the potential to become big.
To test if a company is big is quite simple. You only need to know two things.
First, if the company is famous or has presence in many countries and markets.
Second, you could check for its market capitalization and compare it to some other big companies.
You must remember one important thing. Longer investments give greater returns, mostly. However, staying in a position for a long time implies sacrifice, discipline and a certain amount of faith.
Consider that companies like Tesla, Apple or Microsoft had rather small beginnings before becoming renamed companies.
Lastly, you should check when was the company stablished. This is no an exact measure of potential success; however it could give an idea about the growth and ambition of the company. Check the date on which the company went public as well.