The economic crisis that began in earnest in 2008 continues to linger. Unemployment remains high and the stock market is still volatile. Many investors have retreated from stocks and are holding cash or other assets. However, even cash is becoming less than an ideal holding at this point.
A lot of investors are eager to discover the qualities that they should seek in a stock that will protect their money in this difficult financial environment. The truth is that, even in these troubled economic times, there are many companies that demonstrate reliability for investment. To invest in them can do much more than help you survive the crisis. They can weather this crisis and return wealth steadily in the long-term.
Desirable Qualities in Companies Worthy of Investment
This should be a valid criterion for any investment but, often during good times, people will try to make money off investments in companies that are struggling but show some promise. Now is generally considered a good time to avoid risky ventures and stick with companies that have regular earnings or even increase earnings year after year.
Companies without debt would be ideal but it would not do your portfolio any good to entirely avoid companies that are in debt. However, any company worthy of your money should be reducing its debt year after year.
Many investors prefer to avoid looking at technical details or price performance as much as other investors. Instead, they want to know that the companies in which they invest make something necessary rather than ephemeral or based on a fad. Examples of such necessities include pharmaceuticals, food, lumber, etc. Making these materials does not guarantee success but it provides some assurance of reliability.
One of the key fundamentals at any point in a company’s history is its management team. This is even more critical during a crisis such as the one that exists at the present. Investigate who is leading the companies that you are considering before you invest in them. Check their records of success. You want to see that they improved a company’s earnings in previous jobs or they saved foundering companies with excellent financial leadership.
These are all desirable qualities in companies. However, you should also remember that times of volatility or crisis can also spur unusual profits in some companies while ruining others. Wise investments now may do more than protect your money. They may return unexpected wealth.