10 tips for buying good shares 2023
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10 tips for buying good shares 2023
Do you want to make an investment in the stock market? So, before you buy stock, keep the following points in mind. Some basic points for those interested in share trading have been highlighted based on expert opinions and domestic and foreign market experience. However, these methods are not always effective. It is difficult to achieve desired results, particularly in the short term. However, investing with these factors in mind can produce good long-term results.
1. Examine the price-to-earnings ratio (P/E). It should be under 20. The lower the PE ratio, the lower the investment risk. The price-earnings ratio measures how much a company's stock is worth in relation to its earnings. If a company's earnings per share are 5 rupees and its market price is 45 rupees, the price-earnings ratio is 9.This means that if the company pays out all of its earnings as dividends, it will take 9 years to recoup the investment. However, if the share's market price was Tk 100, the price-earnings ratio, or PE ratio, would be 20. That is, if the company's income stream remains constant, the investment will be repaid in 20 years.
2. Check out the asset value per share. The market price should be adjusted as a result of this. However, unless the company enters liquidation (liquidation), the investor is unconcerned about the asset value. When the company is liquidated, only shareholders are entitled to a portion of the assets. In this case, too, the bank loan and other obligations are paid off before the asset is sold. The remaining funds are distributed among the shareholders.
3. Examine Earnings Per Share The more there are, the better. Higher EPS implies greater dividend potential. If the EPS is low, so is the dividend potential.
4. Calculate the total number of shares. And watch how far it floats. If the number of shares is low, the price is more likely to rise, according to the demand-supply formula. However, if the number of shares is greater, it is more readily available in the market. It is also preferable to purchase shares that are traded on a regular basis. Because if you require money quickly for any reason, you can easily obtain it by selling shares. However, if you invest in shares that are not traded on a regular basis, you will be unable to withdraw your money in an emergency.
5. See also the authorized capital to paid-up capital ratio. If the capital amounts are close, it is difficult to issue bonus and right shares. In this case, the company should increase its authorized capital sooner rather than later. These factors should be considered by investors who have a preference for bonus dividends.
6. Dividend Yield: In most cases, the market value of the shares is greater than the face value. As a result, the dividend rate does not reflect the actual return. Dividend yield is the exact return on investment. Dividend yield is the percentage of dividends received based on the market value of the investment. Dividend yield is calculated by multiplying the declared dividend by 100 and dividing it by the share price. The higher the yield, the higher the earnings of the investor.
7. Examine the previous three to four years' performance. Check to see how much it pays in dividends. See the yearly average price. Buy stock at or near this price.
8. Review the last 5-6 months of DSE news. Examine the economic and business news from the country and around the world in newspapers and magazines. It will then be much easier to identify potential sectors and companies.
9. DSE now reports earnings every four months. With a little thought, it is possible to predict how much profit can be made at the end of the year.
10. The goodwill of the company, as well as the social and political aspects of its directors, should be considered. The foresight, skill, and sincerity of its entrepreneurs determine how well a company will do business and the likelihood of business expansion. Similarly, it is up to them whether profits are included in aggregate, whether the dividend area is overly conservative, or whether investors' interests are considered.
Remember that profit must be guaranteed at the time of purchase, not at the time of sale. That is, if you can buy shares at a good price, you have a good chance of making a profit. If the price drops significantly at the time of purchase, the profit potential will be reduced slightly.
Which share will go up in 2023?
As a result, the stocks to watch in 2023 will primarily be in the BFSI, infrastructure, defense, capital goods, housing, railways, and cement sectors.
What is the best investment in 2023?
1. 7 Best Types of Investments in 2023
2. High Yield Savings Accounts.
3. Short-Term Certificates of Deposits.
4. Short-Term Government Bonds Funds.
5. S&P 500 Index Funds.
6. Dividend Stock Funds.
7. Real Estate & REITs.
8. Cryptocurrency.
Will stock market do well in 2023?
Analysts predict that negative overall earnings growth will continue in the first half of 2023. Analysts predict that S&P 500 earnings will fall 5.7% year on year in the first quarter and 3.7% in the second quarter.
