Stock Investor

Successful Stock Investor – Responsible Factors

A trader who actually knows the difference between a poor investment and wise investment is counted among the successful investors. There are several investors who generally think that being a part of great companies would assure great investments, however this does not always proves to be right. When talking about stock investors, they can be classified in to two categories; first one is growth investor, while the second one is value investor.

If you are an investor who give priorities to only good companies offering great prices rather then going with great companies offering good prices then you are a value investor. There are valuations used by such investors such as getting an idea from calculating dividend yield, ratio of price to earning, and the ratio of price to book in order to see how successful can a trade turn out to be and how much risk is involved. Then there are investors who prefer companies that are constantly growing and are ahead of the entire stock market or industry on the basis their revenues or earnings; these are growth investors. Such companies mostly pay no or too little dividends and do not prefer using the profits for funding future growth or expansion of their existing business.

Growth investors keep the prices as a secondary consideration and go for great companies while the value investors seek to go for companies considering the prices they offer. I would not say that either of the way of investing is better since it depends on how skilled an investor actually is. Value stocks should be your choice if you are not much of a risk taker. While on the other hand, growth investment can be an option for high risk takers. However, if you are a moderate investor and want to avoid too much or too little as well then investing small portions in both the categories would be a wise move.

When you consider short term performance then growth investors are found successful but the long term race and results go in the favor of value investors. So, in order to be a successful stock investor, you must select the type of investment which you would like to make in the stocks trading business. However, it is advisable here that you must select the type of investment on the basis of your own interest and the amount of risk you can bear because selection of the type of investment is a major responsible factor that would contribute to your success in stocks trading business.