The stock market is one of the best destinations to lasting wealth. This is because there is serious money in this business and you can master the secrets of the stock market easily. Learning how the stock market works will help you identify top rated value stocks because this is where the big money is. Below are some qualities of the stocks that will generate wealth for you.
Low Price Stocks
Low price stocks are also called “penny stocks”. This is huge value in these stocks because the unit cost of each stock is quite low. This means you can buy a large quantity of penny stocks with a relatively small amount of capital. Another advantage of investing in penny stocks is that the price of these stocks is likely to rise. When this happens, you make good money from capital appreciation.
Blue Chip Stocks
The blue chip stocks are the stocks of established and reputable firms. These stocks have a relatively high price because there is a high demand for these stocks. However, the price should not discourage you from investing blue chip stocks. There is great value in blue chip stocks because the companies behind these stocks usually pay regular dividends. In some cases, you even get bonus shares in addition to dividends. From the investment perspective, this makes a lot of sense because you get excellent value for your money.
Initial Public Offer
One way to make good money in the stock market is to target “Initial Public Offers” (IPOs). When a public company offers shares to the public for the very first time, this is called an initial public offer. The main advantage of buying your stocks from an IPO is that the price is relatively low. In most cases, you make profit from these stocks because the price is bound to rise shortly after the IPO is listed on the stock market. Another advantage is that you do not have to buy the IPO stocks from the secondary market or from a stockbroker. You can simply by the stocks from a bank, an issuing house or directly from the firm offering the stocks for sale. This move saves you money because you do not pay any fees to a stockbroker for this transaction.
Final Word
After you buy top rated value stocks, you can sell them after a while and make profit. You can also hold on to the stocks for the long term. There is big money in the stock market. Invest wisely and watch your money grow.