Big Companies

When searching for companies to invest in, concentrate your efforts on big companies, in the sectors that are more likely to do well, such as oil and gas or the banking industry. Be careful, and be patient. Don't rush, and search carefully. Just because a company is large, doesn't mean that it is doing well. Bigger is not better.

I started with $1000, made $13 000 on small stock technology companies back in the day when the stock marked was doing well in about the year 2000, and ended up almost nothing, except for the money I put in, which helped me pay off my student loan. Since then I have learned that smaller is not necessarily wise.

Small cap companies might be a low cost way to get into the market, with the potential of large returns; however, that is not always the case, except if the market is doing very well, and the company is going full steam ahead. Small cap companies are greedy. They want to make the most money possible in the shortest time frame. Therefore, they encourage venture capitalists to invest in them, put themselves on the market, and start spending your money.

The money is used to buy new equipment, invest in new property, research on new products, and to set up new stores. This just adds expenses to the companies balance sheet, without the right advertising, promotional efforts, and interest from the public, it may be all for nothing. In the end the customer gets lost, and the company goes under. On the positive side, it may keep the company afloat for a little while longer.

Back to big companies. If your looking for companies to invest in, never look at short term ROI, always look long term. Nowadays, with the economies the way they are, you are not going to make money overnight by investing on the stock market.

The key is to make a budget of $2000, buy one company that has been around for the last 10 years, and that has been paying out regular dividends, then wait. Set a target, and when that target has been achieved, sell, and buy another company.

Look at the dips and valleys of the stock chart and determine when the best time to invest is. I usually look for good performance over the last 3 months, and then estimate how long it may be, before I get my money back.

Remember, though, don't rush. Look around carefully. Make sure the company you choose does not have high expenses, and liabilities. Make sure that it is still making money. Go back a few years, look at the revenue. It should be stable, and consistent.