Brad Perry, in his classic book Winning the Investment Marathon, wrote that investing ?is pursued most successfully in a simple, straightforward way.? This is the Golden Rule for most investors who employ fundamental analysis and have a long-term perspective. Buy stocks of high-quality companies at good prices and continue holding them as long as the companies? performance merits doing so.
Sales drives earnings; earnings drives the stock price. That?s what it comes down to for fundamental investors. You might hear of different ways to buy and sell stocks, and countless books have touted systems that promise great returns. But over the long term fundamental analysis is what works in building wealth.
Fundamental analysis comes down to studying a company?s financial performance. Broadly, there are those who look for growth stocks and those who look for value equities, but the line between value and growth investing is gray: As Warren Buffett says, value and growth ?are joined at the hip.?
Value investing, as practiced by Buffett and his mentor Benjamin Graham, is a time-tested method involving fundamental analysis that has served many investors well. But for the typical person who has a job and family and who is managing his own portfolio while following Perry?s admonition to keep it simple, fundamental analysis focused on growth stocks might be more appropriate.
This is because individual investors can spot a good growth company quickly. BetterInvesting?s Stock Selection Guide arranges the fundamental data in a way that allows users to see a company?s growth and management performance as well as the stock?s investment possibilities in just a few minutes. Meanwhile, the work required to spot a good value stock is a little more complex.
Read full story from BetterInvesting Magazine here: http://bit.ly/IEc4Av
This is a must-read for all investors interested in learning more about evaluating the investment potential, checking valuation, return expectations and managing risk.
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More information regarding BetterInvesting?s Stock Selection Guide and an opportunity to view the Introduction to The Stock Selection Guide series for a limited time?at: http://bit.ly/Jqi4yb
Discover some of the tools & resources available to?BetterInvesting Members: http://bit.ly/IjeAY7
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