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Investing In Quality Shares

11/12/2009 by admin

Why You Should Only Be Investing In Quality Shares
With stock markets tumbling all around the world, 2008 has been a truly awful year for stock market investors. However a lot of people, myself included, think that this is now a good time to slowly start snapping up some bargains, with the focus being on quality shares.
I would define quality shares as being shares in large, well-established companies that consistently grow their profits and their dividend payouts every single year. Furthermore in this credit crunch that we are all now witnessing, they should also have little or no debts so they are unlikely to run into any financing difficulties in the near future.
Nowadays there are not too many of these companies left, but they do still exist. The key is to adopt a Warren Buffett style of investing and focus on long-term profits rather than short-term gains. If you look to invest in market-leading companies who don’t have to worry too much about new competition, then you should do well in the long run, particularly if you get your timing right.
For example, two such shares in the UK are Tesco and Rio Tinto. Both are huge companies who are at the forefront of their industry and have a long and distinguished record of profit growth. Although profits may inevitably drop slightly in the short-term, in the long run they should, in my opinion, continue to see strong earnings growth in the years to come.
So now could be a good time to start drip-feeding money into these types of market-leading companies because they have been sold off sharply along with the rest of the market. These times of doom and gloom very often present investors with excellent opportunities to invest in good quality companies at bargain prices, and I personally think we are in one of those times at the moment.
It’s certainly a much better strategy to focus on large high quality companies because smaller companies are very much out of fashion at the moment, and are seen as a much riskier proposition at a time when all companies are struggling to raise the finances needed to survive.
The Warren Buffett investment method remains one of the best investment strategies so as long as you are patient and are prepared to hold onto the shares of these companies for several years, now could be a good time to start buying these quality shares. While it is very much a trader’s market at the moment, there are still good buying opportunities for the traditional long-term investor as well.

With stock markets tumbling all around the world,  lot of people think that this is now a good time to slowly start snapping up some bargains, with the focus being on quality shares.

I would define quality shares as being shares in large, well-established companies that consistently grow their profits and their dividend payouts every single year. Furthermore in this credit crunch that we are all now witnessing, they should also have little or no debts so they are unlikely to run into any financing difficulties in the near future.

Nowadays there are not too many of these companies left, but they do still exist. If you look to invest in market-leading companies who don’t have to worry too much about new competition, then you should do well in the long run, particularly if you get your timing right.  Although profits may inevitably drop slightly in the short-term, in the long run they should, in my opinion, continue to see strong earnings growth in the years to come.So now could be a good time to start drip-feeding money into these types of market-leading companies because they have been sold off sharply along with the rest of the market. These times of doom and gloom very often present investors with excellent opportunities to invest in good quality companies at bargain prices, and I personally think we are in one of those times at the moment.

It’s certainly a much better strategy to focus on large high quality companies because smaller companies are very much out of fashion at the moment, and are seen as a much riskier proposition at a time when all companies are struggling to raise the finances needed to survive.

The Warren Buffett investment method remains one of the best investment strategies so as long as you are patient and are prepared to hold onto the shares of these companies for several years, now could be a good time to start buying these quality shares. While it is very much a trader’s market at the moment, there are still good buying opportunities for the traditional long-term investor as well.

Filed Under: General Tagged With: finance, financial planning, home based business, investing techniques, investment, investment techniques, investment tips, profitable trading, quality shares, shares, stock, stock investing, STOCK MARKET, stock selections, stock trading, STOCKS, trading, trading in stocks

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