[Beginner’s Money Making Series] Learn how to pick stocks in 8 minutes! How to pick a heavy position in U.S. stocks?

Many people will ask how to start buying stocks and how to pick some stocks that can be heavy positions. Here comes the key word, heavy positions, because to be serious, not every stock can be heavy positions. If you buy one stock, if you buy more than one stock, you have to check what proportion of your position should be occupied by that stock. I actually have some requirements for choosing stocks that can be heavily loaded, especially given the recent economic environment and the volatile stock market performance. If you pick just the right stocks, you won’t be able to do anything if the market plummets. As for panic! So pick some stocks that are worth investing in, put them on your watch list, and wait for the opportunity to buy them! Today’s content is so rich, remember to read to the end, I hope it helps you!

First of all, we need to know that we should not randomly pick stocks with heavy positions. I mentioned in one of my previous videos that the most amazing thing about long-term investment is the compound interest effect. For details, you can click on the upper right corner to view the previous video and then come back. , we rely on compound interest to start saving 5,000 mosquitoes every month. With a return of 10%, the total investment of 1.2 million principal will become 3.79 million in 20 years. If you really save 5,000 yuan a month, and you are really good at earning a living, your starting point has already been beaten by many people, so the first factor to consider when investing is time. This example shows how many it has. Great power.

The second factor to consider is the rate of return. If your return on investing in stocks cannot exceed 10% for one year, it is better to buy the S&P 500 ETF (VOO) directly, because 10% is the average return of the S&P 500 Index in the US stock market. , speaking for myself, I require my own stock performance return rate to be higher than the S&P 500. I suggest that you have a return rate of your own in your mind, so this article will talk about some selected ones that outperform the S&P 500. stocks. Well, the first thing to pay attention to when choosing a stock to invest heavily in is to look at the trend of this company, look at the trend from 2009 to 2020, especially from 2017 to 2020. What’s the explanation? If there is a stock that has not risen in the bull market or rising market in the past ten years, basically you don’t need to think about it, because you think it will be very difficult for it to rise when the stock market recovers, because In the 10 years of qe, buybacks, the economy, and all kinds of scientific and technological reforms could not achieve the success of stocks. Their fundamentals are actually very serious. When I talk about fundamentals here, they should be the company’s strength or financial situation. Condition. Of course, I don’t mean that these stocks will not rise in the future, and some may double or triple; but from a long-term investment perspective, I will not seize my heavy position/or my wife. Check out these companies. Compared with these stocks to VOO, which is the S&P 500 index ETF mentioned above, if the long-term trend of a stock cannot outperform the S&P 500 index in a few years, basically I will It won't bother me to consider it, unless it has other reasons that can convince me, because if a stock has no way to outperform the S&P 500 in the long term, so logically, then I might as well just buy the stock. It’s RMB 500. 

Our original intention is to buy stocks that outperform the S&P, so first we need to know whether a stock has outperformed the S&P in the past? It's so simple, not complicated, and you don't need to sign up for any classes. Just go to Yahoo Finance, search VOO, press CHART, then click Compare, then select the stock you want to compare, such as Apple AAPL, select the color, and then you will see Apple and The trend of voo return percentage, and then you can compare the selected time above, such as this year, year, five years, etc., you can do some simple screening 

Third, another thing we need to pay attention to is that since this company has cash flow and liabilities, we really need to pay special attention to this, because buying VOO will not lead to such a financial situation, so To ensure whether a company can go through bull and bear markets, and whether it can survive in the most difficult economic period, having a good cash flow can not only help the company save its life, but also determine whether its stock price is is an important factor that will rise. Because a company has good cash flow, it can expand, acquire, steadily pay dividends or repurchase shares, or even monopolize. Running a company from home is like playing Monopoly. Many real estate developers will buy a street and then think about a piece of land to build something. So, which company is familiar with playing Monopoly in this era? It’s a good company, so looking at the company’s strategy is an important part of picking stocks. 

Fourth, both EPS and revenue must grow steadily. The market does not like to be frightened. The reason why stock prices rise and fall so much is because their financial reports are not stable enough. Sometimes they make money and sometimes they lose money, which reflects on them. Our earnings management ability is relatively poor, and we don't know how to take heavy positions. Just like Apple, GOOGLE, or Microsoft, their trends are so stable. Most of the reasons are because their financial reports have always been so stable. Microsoft has been warned by the U.S. Securities and Exchange Commission before, saying that they were too conservative and moved a lot of revenue back. But in the era of the Internet bubble that began in 2000, many companies were racking their brains to push future revenue forward, and even falsified it. However, Microsoft is like a spring of fresh water when looking at this situation, so it is very important for a company to have good management and earnings management capabilities. 

The last point is to see whether the company has repurchased its own shares. Repurchasing shares is a very important factor in causing the stock price to rise. Repurchasing shares means that the company buys back its own shares. What is the point of buying its own shares? The result, of course, is that the stock price will rise. It sounds so straightforward, but it is actually a virtuous circle. Because repurchasing shares will increase EPS, that is, earnings per share will increase. Because the number of shares on the market decreases, EPS will increase, and it will be easier for the EPS on the financial report to exceed expectations. Everyone has heard that if the financial report is better than expected, the stock price will rise. Sometimes you will hear that the stock price will rise sharply before or after the market, and then it will rise again to attract institutions or retail investors to enter the market. Once they buy, The stock price will continue to rise, leading to more institutional buying, which will increase demand and the stock price will continue to rise. Such a virtuous cycle is very good news for shareholders. It’s so easy to tell where this company is buying back its own stock. Google can help you. In fact, many websites have such information or news. 

Speaking of which, it is almost the same. If you have not opened a securities account, you are welcome to follow the link below to open an IB account. It has low transaction fees and an advanced trading platform. You can buy stocks, futures, foreign exchange, bonds and funds. If If you want to know more about premium financing and a stable annual return rate of 10%, please click on my link below and you can also get $100 supermarket cash coupons

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