Stocks are a high-risk, high-yield investment tool and are favored by many investors. So how to make long-term investment in stocks? What are the advantages of long-term investment? Hong Kong Securities has also prepared relevant content for everyone’s reference.
How to make long-term investment in stocks?
When making long-term investment in stocks, investors need to pay attention to the following aspects:
1. The company’s fundamentals, that is, the company’s operating conditions, financial situation, career position, development prospects, etc. Generally speaking, long-term investment should select high-quality company stocks with good profitability and growth potential.
2. The company's valuation level, that is, the market price of the company's stock relative to its intrinsic value. Generally speaking, long-term investment should avoid popular stocks that are affected by short-term hot spots in the market and have bubble stock prices, and choose stocks with low valuations and large upside potential.
3. The company's dividend policy, that is, the method and proportion in which the company distributes profits to shareholders. Generally speaking, long-term investment should give priority to stocks of companies with higher dividends.
What are the advantages of long-term investment?
1. Save time and energy. Long-term investment does not require frequent attention to market dynamics and position adjustments, but only requires regular review and evaluation of one's own investment results, and adjustments and optimizations as needed, which can improve investment efficiency.
2. Reduce transaction costs and taxes. Long-term investment does not require frequent trading of stocks, nor does it need to pay a large amount of transaction commissions, stamp duties and other fees, which can reduce transaction costs and increase yields.
3. Use the compound interest effect. Long-term investment can use the compound interest effect to achieve rapid growth and accumulation of assets. Buying stocks can not only obtain value-added income but also dividend income. Through long-term investment, dividends can be reinvested to achieve compound interest income from financial management.
The above is the knowledge about "How to make long-term investment in stocks? What are the advantages of long-term investment?"