What to Look For With Your Stock Market Analysis

You need to pay attention to many different factors as you qualify your investment options. From growth rate to government influence, your investment options can be affected by so many different factors, it’s mind blowing.

Picking the growing gem of the industry could lead to a lucrative result, but picking the diamond in the rough could lead to even more.

It comes down to how you qualify the place you want to invest your money, and how you monitor it’s growth. To help you place your money is into better investment options, we put together the factors you need to look in your stock market analysis.

The Growth Rate of the Investment

Growth rate is the initial place to look when you are planning to invest. You want to put your money behind something you can get in abundance that has great growth and sustain potential. If you are lost on whether it’s the right time to jump in to an investment, check the overall growth of the investment to make sure the end point on the right is higher than the starting point on the left.

Make sure you look for tools to monitor these stocks too if you do end up investing because you will want to watch for that inevitable plateau. If you see your jumps up and down starting to level out, it’s probably time to look into selling or trading options. Make sure you do this before the stock starts to turn south, or selling might get a bit complicated.

The Health of the Market

A lot of the plateau effect of investments revolves around the market health of the opportunity. If the market is on the rise, chances are the investment will continue its growth. If the market is falling or level, the plateau of an investment might come quicker than you think.

Make sure you are watching rising markets like a hawk. If an industry has been backed with too much initial capital to possibly be profitable, the growth bubble could burst just like the housing market did in 2008.  Although better practices have been placed into the banking relm to help prevent these situations, they are still possible on smaller scales.

The Demand for the Product

The demand for a product or service should help you a better ideal of the long term potential of the investment.  If demand is high, and the supply is keeping up with the growth, you might want to look into an investment there.

If demand is high, but supply is having a hard time keeping up, you can expect that to affect the performance of your investment. Reason being, the limited supply will create scarcity and ultimately drive the natural price of the product in the market up. As this happens, demand will start to fall as people’s perceived value of the product shifts. This could mean a boom into a long term growth at a lower rate, or an initial boom followed quickly by a total decline in public interest whatsoever.

The World Situation

The world situation can really affect the performance of any investment. From exchange rates to cost of raw materials and where those have to come from, there are almost infinite worldwide factors that can create drastic swings in an investment in a blink of an eye.

Take the Brexit situation’s effect of the entire world economy in a matter of days. Markets started tanking as uncertainty about the future of trade with the U.K. rose throughout the EU and the World. Almost every industry felt the immediate effects of the Brexit situation, but as time goes on, things seem to be leveling out as the U.K. economy sorts itself out and trade continues.

Anything from an economic crash to a natural disaster can cause massive market shifts in the blink of an eye. Even a simple shortage can result in the tanking of an investment.

Government Factors

When things are going well, the government and the FED work together to keep the overall market health high with lower interest rates. When things aren’t going as well, they turn the tides and take strict control of the money already in circulation by raising interests rates, or in other words, they make it less favorable to take a loan, so they don’t have to make as much money.

By doing this, they can help the market keep control of inflation rates, and stop the market from making huge interest bubbles of debt. Ultimately, the goal is to prevent market crashes.

Keep an eye on these rates and watch for market bursts, so you can get out while you still have your investment in hand. Remember, these rates can cause investment opportunities to fluctuate throughout the day, but as long as you end the day up on the market, you’re golden.

 

Conclusion

If you keep your eyes on these factors as your pick and monitor your investments, you will be sure to become the market hawk you have always wanted to be. Sell before you can’t, trade when the time is right, and buy when the going is good. Of course, it’s farm more complicated than that, but with time and practice, it won’t be.

What factor do you pay special attention to when you are looking to invest your hard earned money? Do you have any special tips and tricks to making the most of your investment? Share your investment tips and questions in the comments below.