Question

With CD interest rate hovering around 1%, many investors look for other options to generate higher returns. If you have $80,000 to invest, what will you do with the money?

1. Research: What are the top 10 questions to ask before considering purchasing stock?

2. What type of return are you looking for? Steady dividend stock? or monster growth stock?

Please post your comments then provide feedback to one or more of your peers

Answer 1

Answer-

As CD's are considered more safe than stock because CD's are guaranteed by bank to give principal money along with the decided rate of interest on certain maturity period on the other hand stocks are considered to be high risky and can even make your principal money to zero. But when it comes to return stocks give higher return than CD's if the share market goes up and the company doing well. So it depends upon the capacity of taking risk, understanding of market, willingness to purchase and many other factors that decide whether to invest in CD or in stock.

1-. Top 10 questions to be asked before considering purchase of stock-

I) what does the company do? The basic work of company in which it deals.

ii ) Is the company profitable? Profitability of the company like net profit, gross profit,eps, dividend

iii ) what is company earning history and outlook? Past years company performance on earning and overall outlook of the company to present as well as future challenges.

iv ) how richly is the company stock valued? Method of stock valuation and how much market pays for it's.stock

v ) company competitors?? Who are the competitors of company and what are their performance

vi ) who runs the company?? The management of company, directors ,CEO, as well as bod

vii) company balance sheet cleaniness?? Means is there any kind of suspicious assets or debt capacity of company, repayment of debts, etc

vii) SEC reports ??? Can have a look at SEC reports

ix ) Investigation about reg flags?? In SEC reports reg flags reflect integrity of the company whether the company is following aggressive policy?

x ) Sustainability?? Is the company competitive sustainable or not or it can survive in the future competitions what are the plans and actions for the same.

2--- Steady Divided Growth or Monster growth stock?? As per the capacity and market knowledge an investor should opt for whether he wants to invest in steady divided growth stock or Monster growth stock. Because if an investor is new to the market and have the hardcore earned money to invest then he should go for steady divided growth stock. It takes time to earn profit but keep minimum risk. Where if an investor is having a huge experience in trading and have spare money to invest and want to take risk then he can opt monster growth stock because this type of stock will give huge profit within a short span of time when going good while gone even below it's issue price when performing not good. So it depends upon the investor and his situation as well as market performance.