Sound Investment Strategies Which Will Stand Out All The Time:

It is sad to say that the majority of investors like to listen to tips from all sources instead of doing their own homework prior to investing. Even fund managers conveniently buy shares listed in the top actives of the day. Thus fund managers of yesteryear lost heavily when their shares  dropped heavily, and unit trust holders also lost heavily.

Wise investors must follow the following steps before deciding to buy any share in the market if they want to avoid heavy losses when the market collapses. They are as follows:

1) Has the company been making money for the past 3 years out of the lst 5 years at least.

2) Has the company been paying consistent dividends for the last 5 years as you can manufacture profits, but you cannot manufacture cash to pay out the dividends if the accounts are phony.

3) Is the dividend yield based on the share price which you intend to buy has a yield of at least 4%, i.e. if the share you are buying is $1,000, you must get at least $40 in dividend even consider it as a safe investment. If not, don't buy at all.

If this passes the above 3 guidelines, you are reasonably assured that it is an investment grade share and not a speculative buy. It will automatically eliminate some 80% of all shares listed on stock markets throughout the world. 

You must read the latest Annual Report and analyse the Balance Sheet, Profit & Loss Statement, etc. If you don't even bother to do this, you deserve to lose money as there is no such thing as a free lunch. 

Initially all will make money when the market is going up, and when the market collapses, some 90% of them will be losing money. Remember this, if it is really so easy to make money, nobody will be working today. All of us will just be buying shares to be rich. Alas, this is just a pipe dream. 

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