In 2020, the huge growth trend in Australia – and indeed around the world – was working from home. In late 2020 and now into 2021, that trend is definitely investing. Huge numbers of first-time investors have moved into the Australian Stock Exchange through brokers like CommSec, OpenTrader and SuperHero, and while getting started in investing is easy, knowing where, when and how to invest is a much more subtle skill.
So you’ve found a firm you want to invest in, you’ve got your broker ready and you’re all set to open the position. Before you do so, though, it’s vital that you do your due diligence and get all the information you need about the company. After all: if some sort of unpleasant information is lurking in the background, you need to know about it as soon as possible before you make a trade. This article will show you how you can use the news to get the info you require.
Expansion and growth
One key thing to look for when you’re in the business of stock investing is whether or not the firm you plan to go for is expanding or growing. If so, that could be a strong sign that future revenue and profit is on the way. However, it’s also potentially a sign that they could be overstretching themselves financially. Certain companies and industries will stand out as safer bets in terms of whether they will be growing simply due to the nature of what they do. Renewable energy stocks are certainly worth keeping an eye on as the world will continually explore the ways in which we can reduce our carbon footprint.
Having a long, hard look at the reasons why the firm plans to expand, plus details of any market research they’ve done, is wise – but you may have to go one step further than the initial news story in order to find that out. Try visiting the investor relations page of their website, or perhaps going to them directly.
Often, companies grow by receiving inward investment from venture capital companies and others. News that this has happened is often a good signal that the firm is trusted by others in the financial sector – and it can, to some extent at least, be interpreted as a sign that the firm is in good financial health, as the investors would have done plenty of due diligence before going ahead – especially if they’re institutional investors. As ever, though, it’s still a good idea to do your own research: investment houses often operate on a model by which they invest in many firms and recoup their profits even if only one succeeds, so news of inward investment is not always a guarantee.
Changeover of personnel
Finally: the business pages of newspapers are often full of stories about firms which are seeing high turnovers of senior staff. If senior figures at leaving a company at a rapid rate, it could indicate that there is some sort of underlying problem there. However, it can sometimes be hard to glean this information from newspapers alone, so it’s often worth doing some wider reading on sites like Glassdoor to get a review for how those working at the firm feel – and whether or not it is actually a sinking ship.
Overall, it’s wise to never plunge into an investment without first educating yourself about the company’s position. If you don’t know details on everything from the company’s expansion plans to its debt levels, you’re likely to be at a disadvantage in the markets. The good news, though, is that with so much news content available, it’s possible to get what you need quite quickly and without needing to hunt around.