6 Qualities To Look For In A Stock

February 3rd, 2021

If you have done any sort of retirement planning, you’ve probably heard about the merits of building a diversified portfolio. You’ll also know that simply knowing the terminology doesn’t make ou an expert. There’s still plenty to understand about what investments will turn into the best retirement for you. 

A diversified portfolio contains a mix of stocks, fixed income, and commodities. But stocks can be challenging if you’ve never invested in them before.

Fortunately, you don’t have to keep your eyes glued to financial newspapers to find success in stocks. Historically, stocks tend to produce bigger long-term gains than other types of assets. Some of the best stocks return about 10% per year, which is a much better return than a bond and infinitely better than your trusty old piggy bank. The other benefit is that stocks tend to be better for beating inflation over time.

Though there are some downsides, stocks are generally considered an important component to any portfolio. One of the most important things to remember about stocks is that they often require patience.

For example, every now and then a stock comes up on the market with the potential to revitalize your retirement plan. According to Chief Investment Strategist Alexander Green, it’s possible to retire on a single $3 stock. Here are more of the qualities Green looks for in a “perfect” stock.

  • Inexpensive, with big potential for growth
  • Associated with cutting-edge technology
  • Potential in future sales and profits
  • Pays enormous dividends
  • Profit margins protected by patents and trademarks
  • Undiscovered and relatively unknown among regular investors

While that’s quite the list of qualities to look for in a stock, they do exist on the market. Sometimes it’s possible to find success by concentrating your investments in one of these “perfect” stocks. So, when you find the right stock and take action, you could grow your investment alongside the founder of the next Amazon or Microsoft or Apple.

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