How to pick the right shares
Below is a MRR and PLR article in category Finance -> subcategory Investing.
How to Choose the Right Shares
Summary:
An insightful guide on share selection strategy to enhance your investing performance.Keywords:
investing, safe, shares, wealth building, stocks, strategy, selection, performance, improve---
Picking the right shares is a question I’m frequently asked about, and I like to address it from two perspectives.
First, let's look at the technical approach: compare your performance to a benchmark, like your country's market average. In Australia, for example, the All Ordinaries Index has yielded over 40% in recent years and averaged more than 10% annually over the past 25 years. If your returns don't match or exceed this, you might need to reassess your strategy.
Interestingly, about 70% of fund managers fail to beat this market average. As an individual investor, without the constraints fund managers face, you have a real opportunity to outperform it.
How can you do this? Focus on three key characteristics when selecting shares:
1. Leading Companies: Choose shares from top companies in their industry?"those within the largest 100, known for their success.
2. Long-Term Uptrend: Look for shares with a price history that trends upwards. Ideally, the chart should move from the bottom left to the top right.
3. Outperformance: The share should consistently outperform the market average, ensuring your portfolio has a better chance of doing the same.
Applying these criteria will help you select fundamentally strong shares that are trending upward and outperforming the market. This gives you the best chance to surpass the market average.
What Are Your Goals?
The second way to approach share selection is to consider what you want to achieve. Many investors aren’t sure about their desired returns, which makes it difficult to recognize success. Clearly defining your goals will allow you to measure your achievements accurately and adjust your strategy as needed. Setting clear goals helps you determine when you've reached them and ensures you can make informed decisions along the way.
By focusing on these strategies and setting clear objectives, you can enhance your investment performance and work towards building wealth effectively.
You can find the original non-AI version of this article here: How to pick the right shares.
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