What is the Stock Market? A Beginners Guide to Stock Trading

What is the stock market? A beginners guide to stock market trading​

This guide provides a detailed overview of what the stock market is, understand stocks and what drives the value of a stock. By the end of this guide, you will have a solid basis to start trading and investing in stocks.

by Starttrading.com 

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When making any investment it is important to gain some understanding in what you’re getting into. This will allow you to achieve the best results possible and limits the amount of mistakes made. If you want to actually learn how to trade stocks you’ll need a basic understanding to begin with, on how stock trading works which will be explained in this article. After reading this stock market guide you will have an a basic understanding to get started trading stocks, if you want to take your trading tot he next level a trading mentor is very beneficial, especially if you are looking to make money from stocks in the long run. 

What is a stock?

A stock is a type of investment which allows you to have a share in a company. When you buy a stock from a business you’re essentially purchasing a small piece of that company which is called a share. Shareholders contribute to the company’s’ profits as they are investing into the company’s future as long as they own their shares. Investors typically buy stocks from companies that they predict will increase in value over time. If this happens then the stock brought can be sold for a profit. For many businesses distributing stock creates an opportunity to raise money to invest and expand in their company. Whilst for investors or potential investors like yourself, stocks enable a growth in your money and outpace inflation in due course.

The main goal when investing into the stock market is to make a profit by selling the stock for more than you paid for.

What is stock trading?

The stock market provides a secure and regulated environment for traders to participate in regular activities of buying, selling of shares in publicly held companies with a zero to low operational risk. The supply and demand of each company’s stock is tracked through stock exchanges which directly affects stock prices. Public companies sell their stock through a stock market exchange like the New York Stock Exchange (NYSE) or Nasdaq for example although there are many other stock markets exchanges all over the globe. Investors are then able to buy and sell these shares among themselves through stockbrokers.  Stockbrokers are individuals or firms who are licensed to trade stocks through the exchange-this allows them to buy and sell at your request. In exchange for dealing with individuals trades, the broker collects a commission or a fee. You can sign up to a stock broker here >

Long–term vs. short-term stock trading

With fluctuations in the market happening on a daily basis there are two main strategies used by investors: short-term trading or long term trading also known as buying and holding. Investors who do best over the long term have a diversified portfolio of many stocks which they hold onto through good and bad times. This approach requires you to wait until the stock’s value has increased over an extended period of time – also known as passive trading. Having patience and the ability to overlook short term fluctuations is needed with long term trading as it is the ongoing performance of the stock which is important not the recent ups and downs happening on a daily basis.

On the other hand, short term trading is about using the constant volatility and fluctuating prices in the market to your advantage.  Investors who use this method of trading watch the markets for opportunities to buy low and sell high making numerous of trades in a short time period- also known as active trading. This type of trading comes with a potential for easy profit but is also associated with risks such as there may not be rise in value of a low stock price over a short period of time or it may actually lose value. Investors also end up paying more capital tax the more frequently they sell their shares. This was pretty much done to encourage traders to trade over a long term scale. There are many styles of short term trading such as day trading, intraday trading and scalping.

How to invest in stocks

Before you start trading or investing in stocks it is essential that the money you are investing is NOT more than you can afford to lose. This is due to the fact that you will need to be willing to lose some or all of that money as a beginner. The stock market is forever fluctuating and you can never be in control of business setbacks. You also have to consider that the riskier the investment, the higher the potential rewards and losses. With active trading timing, the market is a tricky thing to do as you have to choose the right opportunities twice – once when you buy the stock than another when you sell it.

Traders using this approach will benefit from short term changes in the market by frequently buying and selling based on trends. At starttrading.com, we offer copy trading services, which thousands of beginners people are using on a daily basis, who don’t have the time watch to the market but are looking for short-term rewards. Copy-trading allows you to copy the trades of experienced professionals who have high success rates for every trade they make.

As an investor, your choice in a broker is important because it has huge implications for how much you’ll pay in fees, the types of investments you have access to and what your eventual returns will amount to. You can sign up to a stock broker here >

Some brokers are known as discount brokers who execute trades inexpensively but typically don’t provide any personalised guidance. Full-service brokers offer a comprehensive variation of services including investment advice however the higher quality of service will require a higher fee which some find worth every penny. Both services have pros and cons but it depends on what approach in investing works best for you and what your goals are.

Many first time investors believe that to make money in the market you have to pick individual stocks but this is not the case. It takes time and patience to build a diversified portfolio of individual stocks as you need to do your research in each area of investment.  Alternatively many investors especially those with experience have made their successes through using mutual funds and exchange-traded funds which is also a good place for beginners to get started in trading. This provides automatic diversification that helps to protect your portfolio from inevitable market setbacks even if you have little money to invest. Mutual funds and exchange-traded funds provide a basket of investments in different areas of the markets in one single package.

What determines the stock price?

As I have mentioned a few times the prices in the stock market constantly fluctuate on a day to day basis, you might be asking yourself, what makes stock prices fall and rise?

The very straightforward answer is supply and demand. The price changes in the market reflect the supply and demand in that present moment so when a stock is seen as desirable then the stock price will increase. Factors could include a company’s recent success, a strong industry sector or just plain and simple popularity.

On the other hand, investors may be unwilling to purchase a stock due to a weak industry sector, company failings or the fact that the price is too high. This is called a lack of demand which will inevitably cause the stock price to drop. When this happens at some point the price will reach a point low enough for investors to start buying again where the cycle will repeat itself, this is known as market cycles. These are the trends which active traders will be looking out for.  Passive traders who take on a long term approach to trading would invest in stocks which have strong earnings and a bright future and wait for the price to rise over a long period of time.

Advantages of trading the stock market? 

Investment gains

  • The most prominent advantage of buying or selling stocks is investment gains. Over time the stock market tends to increase in value despite the prices of individual stocks fluctuating daily. Investments in steady companies that are able to grow to give investors returns on investment through profits. With the potential to grow wealth through value appreciation of assets the stock market attracts those with efforts to secure their financial future.

There are two trading methods to make money

  • The stock market gives you the option to make money on both a long term and short term basis. Some stocks also offer the opportunity to earn dividends which provides additional investment income. Dividends can be defined as a payment made by a business to its shareholders. The payouts are usually made in cash although they can also be distributed in stock dividends where stock shares are allocated to shareholders.  In essence, a dividend is basically a reward given to shareholders for owning stock in the corporation.

Easy to buy

  • Buying stocks isn’t as formal as it used to be, with electronic and technological advancements buying stocks online literally takes minutes. You can purchase your shares through a broker, financial planner or online.

The Best way to outpace inflation

  • Historically stocks have averaged an annualised return of 10% although it does mean you must have a longer time scope. Nevertheless, stock investments still outrun the average annualised inflation rate of 3.2%.

Disadvantages of trading the stock market? 

You could lose all your investment

  • When a company does poorly, the investors will sell allowing the stock prices to plummet. As you sell during the company’s hardship you are exposed to losing your initial investment. If losing your initial investment is something you can’t afford to do then you should consider buying bonds. This provides an income tax break if you lose money on your stock loss.

Can be very time consuming

  • Before buying a stock you have to research every company to determine how profitable it will be for you in the long run. You have to learn how to read financial statements, annual reports and keeping up to date with your company’s developments in the news. It is also required to monitor the stock itself as even the best company’s price will fall in the market.

Stock trading can be an emotional rollercoaster

  • Stock prices increase and decrease second by second and many individuals buy high out of greed and sell low out of fear. Focusing on the price fluctuations of stocks can be damaging to your investment especially without patience. It is best to check on a regular basis rather than constantly watch the prices.

You are competing with professionals

  • Along with knowledge and time professional traders and institutional investors have refined trading tools, computer systems and financial models at their disposal which some find intimidating.

Conclusion

To conclude although there are risks to investing in stocks, these can all be minimised with the right guidance and approach to what method of trading is best suited to your goals. Start trading provides services which can both teach and guide you into the right direction of a bright financial future in the stock market. With our mentoring services available you’ll be able to gain the confidence necessary in making sound trades and investments in the Stock, Forex and even Cryptocurrency markets. Book a FREE consultation with one of our trading mentors today for more information or to discuss any of the topics mentioned in this article in further detail.

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Risk Management – 6 Essential Tips Every Trader Should Know

Risk Management – 6 Essential tips every trader should know​

This guide provides a quick overview of the six essential tips every trader should know when calculating risk management. By the end of this guide, you will be able to apply top risk management practices to help you stay safe whilst trading.

by Starttrading.com 

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Risk management tips for trading

Take-profit, stop-loss, indexes, ETFs, risk-to-reward. Confusing right? Does it make you feel bored? Or stupid? I don’t blame you; trading firms love to use confusing terms to make you think that only they can do what they do. Today we are going to talk about risk management.

You can honestly have the best trading strategy in the world, but without solid risk management in place, you can still take loses. As a trader, you need to understand how to manage your risk, size your positions and set your orders correctly if you want to become a profitable and professional trader.

As a trader, managing your risk is just as important as developing a solid trading strategy. No trader is perfect, and all traders will inevitably have losing trades or even losing streaks.

Managing risk is easy once you know the formula, today I’m going to give you 6 simple tips to help you manage your risk straight of the bat.

Tip 1 – Don’t trade more than you can afford to lose.

First things first. The number one thing that you can do to manage your risk like a pro is to never trade money that you can’t afford to lose. I know it can be difficult, but you need to not let your eyes be too big for your belly. Everyone wants to get rich quick, but if you go into this with this mindset, you are taking the wrong approach. You CAN make a lot of money trading, IF and only IF you follow the steps and the processes laid out.

If you are trading money you can’t afford to lose, such as using too much leverage, and you lose significantly or even face the threat of losing significantly, your decision making will be compromised, and mistakes will happen.

When I first started out, I got hit by this myself. It’s not fun, but it happens, every trader goes through this. I’m telling you to prevent you from going through this yourself.

Tip 2 – Allocate time to calculating your risk on each trade.

You should be allocating time for every trade to calculate your risk. This may seem simple to the majority of traders rush this important aspect of analysis.

Take note that when I trade, I often pass up many possible trades that at first look great, but when I start calculating my risk it doesn’t seem to add up. The average beginner spends little to no time calculating and managing risk, before placing a trade.

Why is it important? Well, we are in the business of making money, and in order to make money, we have to learn how to manage risk and potential losses.

Tip 3 – Risk to reward ratio

Life is a constant battle between risk vs reward. No matter what you do in life you have a reward and you have risk. The markets are no different. Trading is NOT gambling; this where a lot of people are wrong. The way you need to look at it is, you have how much you are willing to lose and how much you are willing to make.

This is where we are going to do a little bit of maths, don’t worry I’ll try to keep it as simple as possible.

Let’s say you do 10 trades.

And on EACH trade you have a ratio of 3 to 1. Meaning you make $3 when you’re right and you lose $1 when you’re wrong.

Out of those 10 trades, even if your right only 5 times (50%). Then you would make $15 for every $5 you lose.

Tip 4 – Position sizing.

Many traders are just looking to get right into trading with little to no regard for their account size. They simply decide how much they can stomach to lose in a single trade and hit the “trade” button.

More times than not letting the last trade determine the size of the next trade, most likely doubling the size of a position due to making or losing money in a previous trade. meaning they have zero control of risk management.

This is the WORST thing you can do trading. If you are on a losing streak and you are doubling your position sizes. You WILL loose much than you should have.

This ties in with the next tip which is.

Tip 5 – Don’t trade with emotions.

We all have this natural human nature called greed, which is constantly pushing against risk management, some of us experience it more than others. I myself have a high tolerance for risk, due to my experience and personality. But you need to ask yourself the question of how much you are willing to lose on a trade.

Tip 6 – Learn from your mistakes.

It is ok to make mistakes, but not ok to repeat them. Many traders keep losing money, repeating the same mistakes and not learning.

A gambler doesn’t remember what they have done right to make money or what they did wrong to lose. If you remember what part of your strategy has made you money, you will do more of the right stuff and stop repeating the wrong moves.

Let’s be realistic: it’s difficult to remember all the nitty-gritty details of trading tools, systems, entries, exits, news reports, and all of the other complex details. That’s why we write these things down. Successful traders keep good records, review them, and learn from them.

The markets are constantly fluctuating and changing if you don’t adjust your trading strategy you cannot adjust with the markets. A trading strategy will work much more effectively in one market environment as opposed to another. I review my trading data to see how my strategy is performing in the current market to see how I can continuously adjust and improve to maximise my profits.

Conclusion

A fine-tuned risk management strategy is what gives traders the ability to lose on trades without causing irreparable damage to their accounts. Think of it this way. A day trader can have a 50% win rate and still be profitable if their average profit is twice the amount of their average loss.

If you want to learn more head over to starttrading.com blog. The easiest place to start trading.

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Top Stock Picks for 2019 – What Stocks to Buy?

Top Stock Picks for 2019 – What Stocks to Buy?​

This article includes an exploration of what is on the stock market including upcoming IPO’s, industries, growth and dividend stocks along with other information which is handy to know about the performance of the market.
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2019 is shaping up to be another great year for trading and investing in stocks. With the seemingly endless list of stocks and shares available to buy on exchanges and brokers, it can often be confusing which stocks to buy. In this article, we have laid out the best stocks and IPOs to look into and are likely to see positive price movements.

Upcoming IPO’s

This year brings opportunities with the IPO calendar filled with unicorns which is the Wall Street lingo for fast growing start up companies valued over $1 billion. Below we will list some new upcoming IPO’s as well recently listed.

Airbnb

This company had talks to go public later this year with Amazon veteran to serve as the company’s chief financial officer; however news through the most recent buzz indicated that the company may not be going public in 2019 after all. Nevertheless Airbnbcontinues to grow beyond basement apartments, spare bedrooms and second home rentals with a valuation of $31billion. The firm is a online marketplace which allows people to rent out spaces on a short term basis. As a private corporation last year the company raised $4.4 billion. There are strong ambitions to make Airbnb a global travel community which is built on experiences and content so if interested keep an eye out on the plans behind when and if the IPO will still be in process.

WeWork

Founded in 2010 WeWork is an American company that provides shared workspaces for start up firms, large and small businesses, entrepreneurs and freelancers. After a cash investment from the Japanese SoftBank, the company was valued at $47billion. We work is now in view of an IPO later this year a lot sooner than investors expected having filed paperwork with the SEC on 29th April. With an exceptional growth increase, the WeWork Company now operates three branches: The WeWork shared workplace provider, WeLive- a flexible apartment and rental provider and a WeGrow- an entrepreneurial school.  There has been some speculation on the exact IPO date and share price due to the fact that SoftBank reduced the initial funding proposal from $12billion to $2billion but despite this Weworks CEO has made clear that reduced funds will not affect the company’s IPO. The company has said to have turned over the $2billion during the course of one year. This IPO may provide an interesting opportunity for traders regardless of the concept of the company not being a new idea.  WeWork use of bars, events and fashionable interior seems to appeal to a larger audience than the more traditional providers such as the likes of Regus- a business which has been around for decades.

Palantir

Palantir is a data mining company co-founded by Peter Theil who is one of the brains behind the PayPal payment processing. Reports indicate an IPO in the second half of 2019. It was last valued at £20billion under fundraising around 2015. The company is known for being one of the biggest competitors in Big Data and has earned its reputation from being highly secretive. In 2017 a Guardian headline suggested that Palantir holds as much real-world power as Google, while a more recent Bloomberg article revealed that Palantir ‘knows everything about you’. Although the company may face challenges with going public particularly with concerns of transparency on how data is used, the 14-year-old company is predicted to turn a profit this year- a rare achievement for many tech IPOs.

Levi Strauss

The world-renowned jeans maker is expected to raise between $600 million and $800 million although this has not yet been confirmed. The business was listed for 13 years before being taken private for $1.4 billion in 1984 after experiencing a decline. Levi now wants to capitalise after working hard to improve its performance dramatically with debt reduced to over half in the period of a couple years. Revenue towards the ending of November 2018 had grown by 14%to $5.6 billion with a net income increasing to $283.1 million. Retail, particularly in fashion, is one of the most challenging industries at the moment, mostly due to online competition which in turn is starting to show signs of saturation. Levi has 2,900 stores but primarily sells through 50,000 partners across the world with 105 of its business considered to be online. Nevertheless, Levi believes there’s room for expansion in the likes of Asia, proving it with ample chances to grow.

Livongo

Founded in 2014, Livongo is a company in the health care industry that sells smart devices and software which is designed to help manage behavioural health, diabetes, hypertension and other chronic diseases. The corporation has integrated its platform with Apple, Fitbit and Samsung Smartwatches last month.   Investor interest in Livongo Health inc is considered to be hot, prompting the healthcare technology company to boost its price targets by 13% ahead of the offering taking place Thursday on the NASDAQ. Livongo plans to raise up to $320 million in an offering which could value at about $2.3 billion, that’s more than double of the company’s valuation of $850 million in April 2018. The company plans to sell $10.7 million shares to public investors for between $24-$26 per share and has also set aside $1.3 million to sell to underwriters.

Recently Listed IPO’s

Uber

Uber Technologies inc was one of the highly anticipated offerings of 2019 with a valuation over $80 billion. Uber went public in May at a price of $45 per share on the New York Stock Exchange (NYSE) – a price well short and lower than the anticipated $100 billion valuation. At the start of the year Uber and Lyft were in competition in launching their first IPO where Lyft won. Although the IPO was oversubscribed, Uber settled for a lower price to avoid a repeat of Lyft’s IPO experience late in March where prices were strong then later fell in trade. Uber placed orders for a lower price which fell in the lower end of the $44-$50 per share price range.

However, despite Uber making the efforts to moderate its IPO expectations, some still felt the stock was overpriced. Orders were also put in at a lower price to accommodate mutual fund.  Paypal holdings agreed to invest $500 million at the IPO price in a private placement where associations of the SoftBank Vision Fund, Toyota Motor Corp and Denso Corp would together invest $1 billion for Uber’s autonomous driving efforts adding more to Uber’s total intake.

Beyond Meat

Founded in El Segundo California 2009 this company took the Wall Street by storm when it went public in May making it one of the exciting IPO’s of 2019. Beyond Meat is a food company which makes plant-based meat where it’s premier product is the Beyond Meat which sells at Whole Foods and TGI Fridays to name a couple. Shares rocketed 163% higher on the first day of trading where the company managed to raise $240 miliion at $25 per share resulting in a $1.5 billion valuation.

Upcoming Industries

Cannabis

With a push for legalisation in recent years, cannabis is one of the fastest-growing industries in the US with 33 states currently permitted to use medical cannabis and recreational use being legal in 10 states including Washington DC for adult use. This Cannabis boom is expected to affect more than just medical patients.  By 2020 more people are predicted to be working in the legal cannabis industry than the manufactory industry where revenue is expected to grow from $7.2 billion in 2016 to over 24 Billion by 2020. Investment activity boomed last year increasing to 13.8 billion in total value from $3.6 billion the year before.  As the industry is still moderately new and volatile, it allows plenty of room for companies with inventive growing and plant breeding techniques to shape the market. If the public continues to favour legalisation then the legal cannabis industry will most certainly continue to grow and thrive.

Artificial Intelligence

The global artificial intelligence market size is expected to reach $170 million by 2025 from $4065 million in 2016. The AI market is segmented by technology, geography and industry vertical. The ranges of technologies are broken up into machine learning, natural language processing, image processing and speech recognition. From driverless cars to virtual doctors, AI is transforming the way work, live, travel and how we do business in the 21st century.  In 2016 the machine learning category dominated the market in terms of revenue and is expected to maintain its trend in the upcoming years looking to increase in demand for artificial intelligence industry solutions. Based on industry vertical the market for artificial intelligence is categorised into media and advertising, telecom and IT, healthcare, retail, automotive and transportation whereby the IT and telecom sector is expected to dominate the global artificial intelligence throughout the forecast period. Geographically the market is analysed across North America, Asia-pacific and Europe. During 2017 the North America region contributed to the highest revenue share in the artificial intelligence market and is predicted to secure the leading position with presence of key companies and large investment in the AI market. Key corporations profiled include Google Inc, Apple, Microsoft Corporation, IPsoft and that’s just to name a few. AI have a Rapid growing presence in today’s world with applications ranging from heavy industry to education, it has become prevalent that this technology has the potential to revolutionise how the everyday world operates.

To name a few some of the most popular use of AI today includes Apples personalised assistant Siri which uses machine-learning technology in becoming smarter and better at predicting and understanding our natural language, questions and requests.  Alexa who was introduced by Amazon took the world by storm with its ability to decipher speech from anywhere in a room helping us to search the web for information, shop, schedule appointments, set alarms as well as many other things. It also helps power our smart homes and has been useful for those with limited mobility. Tesla which could possibly be the best car ever made has received so many rewards and recognition due to its predictive capabilities, self-driving features and technological advances. As time goes on these cars are only getting smarter thanks to their over the air updates. Netflixprovides highly accurate predictive technology based on customers choices and response to films. Netflix analyses billions of records allowing it to make recommendations to suit your film preferences and as the dataset grows, this tech will become smarter and adaptive.

While AI can be applied to most sectors once the technology advances enough there are many fields that will soon be reaping the benefits of AI if they already aren’t! According to Forbes industries that will soon be revolutionised by AI are the following:

    1. Cyber security
    2. DevOps and Cloud Hosting
    3. Manufacturing
    4. Healthcare
    5. Construction
    6. Education
    7. Retail
    8. Business intelligence
    9. Mental Health diagnosis and treatment
    10. Supply Chain Management

​2018 Best Performing Stocks

When it comes to trading & investing, history typically repeats itself. It is important to look back at previous trends to give you a better understanding and picture of what is likely to happen. Here is a list of last years best forming stocks:

ABIOMED, inc.

This company made a gain of almost 120 per cent where at the start of the year investors could have more than doubled their money in the space of 10months. The company had later delivered successful earnings in November which had reversed a recent downtrend.

Advanced Micro Devices (AMD)

At the start of last year opening share prices for Semiconductor Company, Advanced Micro Devices were £10.42. Since then AMD stock has doubled during September and the stock actually managed to peak at $30 a share before it fell back down in October. However, once announcements were made that the company’s chips were being used by Amazon’s cloud computing diversion the stock increased.

TripAdvisor, Inc (TRIP)

During 2018 the stock rocketed up the charts. Although it remains inadvisable for investors or beginners to make stock picks based on this sites advice, investing in this company would have been a very wise move at the start of last year. Those who did would of ended up doubling every dollar they invested by Early November.

Netflix, Inc (NFLX)

During 2018 Netflix experienced a 60% gain in just 10 months and has shares well over $300 each as the company continues to stream money into its shareholder’s accounts.

HCA Healthcare (HCA)

HCA Healthcare is a company which operates small care hospitals and surgical services providing for patients at its 179 hospitals and 120 freestanding surgical centres. Its stock performance and earning last year allowed the company to add 60percent to its market value and as admissions arise this should continue to grow.

Best Stock picks for beginner investors

Finding the best stock to watch and buy comes from having basic understanding on stocks itself and knowing what a potential market winner looks like. Take a read on our beginners guide to stock trading to gain some enlightenment on exactly what stock trading is and how to invest in the market.

Doing your research is a huge part of investing in stocks, it is important to look for traits like increased earnings and sales growth, strong return on equity and a fast-growing and industry-leading product or service. When getting started sticking with company’s which you know can be a reasonable approach to take especially if you’re interested in a long term investment.  Here is a list of a few top-quality companies which everyone is familiar with worth investing in.

  • Alphabet (Google)
  • Apple
  • Facebook
  • Nike
  • Disney

Best Dividend Stocks

dividend stock allows an investor to gain regular passive income simply from owning shares in a company. Historically stocks that pay dividends have outperformed those that don’t.  Businesses who are generating strong cash flow and who have strong financials are most likely to produce high returns which attract investors. Some of the best companies who pay dividends include:

Altria Group (MO)

The giant tobacco Altria Group is able to provide major capital back to its shareholders through dividend and buy  backs. Altria which owns Philip Morris USA (who also owns other brands) pays a huge 5.7% dividend due to strong margins, customer loyalty and low reinvestment requirements. Pursuing growth Altria Group invested $1.8 billion in a Canadian Cannabis Company known as the Cronos Group. Altria’s steadiness and ability to promptly take new growth opportunities make it a good investment for a dividend stock.

Target Corp.

With competitors such as Walmart and Amazon, Target offers something for their investors which none of its competition does and that a yield of 3.6%. Targets payout ratio sits on about 41% revealing that without a doubt the company can sustain its dividend payments while also retaining enough to reinvest in growth as well. Despite Amazon’s expansion, sales continue to grow and with a track record of increasing quarterly payments for 50 consecutive years why not invest in this stock which proves to be steady and reliable.

Starbucks 

The company continues to undertake its massive international expansion, increasing its growth phrases and in turn rapidly boosting its dividend payouts. With a free cash flow of over $3.34 Billion and 8 years of uninterrupted payout growth, the company attracts a lot of investors looking for a company with dividend growth.

Aqua America Inc

Trading on the New York stock exchange this water company serves around 3 million customers in Ohio, New Jersey, Texas, Pennsylvania, Virginia, North Carolina and Indiana. With a quarterly dividend rate of 0.219 per share, Aqua America has an annual yield of 2.3%. Although the yield itself may not be exciting, investors who are risk averse should consider this company due to longevity and growth in its payout. Aqua America has been paying out quarterly cash dividends  for more than 73 years and in the past 27 years the company has consecutively raised its payout.

Johnson & Johnson

Aside from being a company to hold an AAA credit rating, this company has one of the safest dividend payouts in the world. Johnson & Johnson relies on its three businesses to bring something beneficial to the table which each individual segment lacks. With it’s business sectors broken down into healthcare products, medical device units and the pharmaceutical segment the company has been able to raise its quarterly payout for 57 consecutive years and has grown its adjusted earnings over the course of 35 years straight. The J&J 2.9% yield attracts investors with their continuous uninterrupted payouts.

NextEra Energy

One of the easiest ways of securing a safe and passive payout is through purchasing companies that deal with a basic need. Historically utilities are viewed as a defensive investment that is turned to when the stock market is struggling or when the economy is wavering as they are slow-growing.  Nevertheless, NextEra isn’t like your average utility stock as the company proactively develops the way utilities operate and is on the leading edge of a renewable energy shift.

Best growth stocks

Growth stocks are beneficial of outsized gains compared to the averages. When investing in the upside of stock investopedia has provided us with some main things to look out for. These include improving fundamentals, good entry points and a history of bullish trading patterns in the shares. The top five stocks viewed as long term potentials are as followed:

Chipotle Mexican Grill Inc

Chipotle has a very strong fundamental history which means that it supports a long term investment approach. The 2019 year over year revenue growth rate increased by +13.9% and the 2019 year over year diluted earnings growth rate was at an increase by +59.6%.  Considering the technical areas also referred to as good entry points a year to date outperformance vs the market indicates +49.12% vs SPDR S&P 500 ETF with recent bullish trading signals.

Facebook Inc, (FB)

With over 1 billion users on its platforms: InstagramFacebook and Whatsapp this company is considered a top social network platform. Facebook stock stands out due to the technical factors of:

    • The company has a year to date outperformance vs Market: +28.34% vs SPY
    • Year to date outperformance vs technology sector: +19.8% vs Technology Select Sector SPDR fund
    • Recent Bullish trading signals

Looking into the fundamental picture of the company it does support a long term investment with the 2019 revenue growth rate increasing by +26%  however the 2019 diluted EPS growth rate -50% which includes $3billion legal expenses related to the FTC.

Illumina, Inc

Illumina is a leading genome and DNA sequencing firm with a year to date outperformance vs market of +0.69% vs SPY and year to date outperformance vs healthcare sector of +10.63 vs health care select sector.  In addition to this Illumina’s growth rate has been impressive with a 2019 revenue growth rate of +8% and a 2019 GAAP net income growth rate of +11%

Paypal Holdings Inc

The leading e-commerce payment company which is also known for its payments through Venmo has a year to date outperformance of +19.96% vs SPY. The year to date outperformance vs technology sector equates to+11.10% vs XLK. Growing rates have been steady with a +12% revenue growth rate and +34% for GAAP EPS growth rate.

Visa Inc

This payment firm also known for being one of the largest globally has been a growth predator over the years. The technical’s’ of the company shows that the outperformance is +13.61% vs market (SPY) and the outperformance vs the financial sector is +17.22% vs Financial Select sector SPDR fund. The company’s stock has been up steadily since January and visa remains in growth mode with a 2019 net revenue growth rate of +8% net income per share growth rate of +17%.

These 5 companies discussed represent a potential buying opportunity for investors looking to take a long-term approach. Considering the strong historical revenue and earnings growth, along with the bullish usual trading signals which they all share; these stocks would be worth a place in the growth-orientated portfolio and a good buy.

Conclusion

To conclude, when getting involved in any investments within the stock market the most important thing to do is your research! Taking the initiative to do your background researches on companies allows you to track the organisations performances where you are then able to discover information which you were unaware of. Research allows you to make more of an informed decision on whether the investment is for you or not. Looking for traits such as a consistent increase in revenue growth and earnings in a company can help give you a gage of progression, although it is important to note that there is always risks in investments and some things can happen within a organisation unexpectedly and out of their control. For guidance or any information related to the topics discussed in the article or trading and investing in the stock market, get in touch with one of our trading mentors today for a free consultation.

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