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The Importance of Investing in Quality Shares

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The world's stock markets have lost around 40% of their value this year as a result of the global economic crisis and fears of a global recession.
It really is a substantial fall.
However there is still money to be made in my view, but I think it's important that you only invest in quality shares if you're hoping to make decent returns.
By quality shares I mean huge companies that have got a long historical record of increasing both their earnings and dividend payouts year after year.
Ideally you should be looking to invest in market-leading companies with little or no debt, who are well placed to get through this forthcoming recession relatively unharmed.
These companies are few and far between but if you can find these companies and buy into them at these bargain prices when they have fallen sharply along with the rest of the market, then you should hopefully expect to make decent profits when the recovery eventually takes place.
This is not the time to take a punt on small high-risk plays that have the potential to become multi-baggers.
These smaller companies in particular are well out of favour at the moment and have been massively sold off as people move their money into safer investments so they are unlikely to recover that quickly, even if we do start to see an overall recovery.
Try putting yourself in Warren Buffett's shoes when investing.
He only invests for the very long-term and only generally invests in huge market-leading companies that are likely to be still growing their profits and increasing shareholder value ten or twenty years down the line.
This strategy has made him one of the richest men in the world, and is unquestionably one of the most profitable investment strategies you will ever come across, providing of course that you are patient and prepared to hold onto your shares for several years.
If you only invest in quality shares then you know that in the long-term you should see your investments grow providing your chosen companies continue to increase their earnings.
Timing is not so much of an issue, but nevertheless if you can buy at bargain prices, which generally only present themselves when the overall markets fall sharply, like they have done recently, then you are substantially increasing your chances of making very good returns from your investments.
A lot of people say that today's markets are ideal for short-term traders, and that is true to a large extent, but it is extremely difficult to make consistent profits trading this way.
It is a lot easier to do thorough research and only buy into quality shares when the opportunity arises to buy into them at bargain prices.
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