Long-term Stock Investing

When investing in a stock for the long term, you want to research the company and its potential for future growth. This page guides you through what to look for.
0/5 Rating
19 Lessons
Beginner
1 hour 7 mins
Written by: Harry Atkins
November 30, 2019
Updated: February 24, 2021

What you'll learn

  • The potential earnings available with long term stock investing
  • How to spot value in the stock market
  • The difference between key financial indicators such as a company's ROA or price to earnings ratio

Key course lessons

  • What investing strategies are available to you
  • How to read and understand a company's financial statements
  • How to undertake a financial analysis before investing your money

If our Stock Markets 101 course was your introduction to stock market investing, think of the Stock Investing course as the next step, your intermediate-level guide to investing. Just remember, this is not a get-rich-quick scheme and takes time, patience, and emotional stability.

This course will teach you how to go from basic concepts to more advanced investing techniques. You’ll also learn how to break down companies’ financials in multiple ways in aid of assessing your investment opportunities.

Requirements

  • Understanding of basic stock terminologies and what they mean.
  • If you’re not confident, we suggest reading through the Stock Markets 101 course first.

Course overview

1. Investing Strategies

Growth Investing Strategy

Growth investing is an investment strategy that focuses on growing invested capital. Growth investors invest in companies, industries, and sectors that are in the early stages of growth, with tremendous growth potential. The investment strategy is offensive rather than defensive as it entails trying to build a dynamic portfolio and…
Beginner 4 min read Stocks Courses

Value Investing Strategy

Value investing is a strategy that involves investing in securities that appear to be trading at a discount relative to their intrinsic value. Investors focus their attention on stocks that seem undervalued, considering prevailing market conditions as well as underlying fundamentals. It is common to find potential investments trading at…
Beginner 3 min read Stocks Courses

2. Financial Statements

Balance sheet basics

Business accounting is a prerequisite for any entrepreneur interested in running a business efficiently. As such, you must understand balance sheets, current assets, and current liabilities. This article explains these aspects of business accounting in detail. What is business accounting? Business accounting entails monitoring a company’s economic events. Professional accountants…
Beginner 3 min read Stocks Courses

Key balance sheet components

The balance sheet is one of the most crucial financial statements for a business, showing the financial position of a company at a given time. As such, this statement is otherwise referred to as the statement of financial position. This article discusses the balance sheet in detail, with emphasis on…
Beginner 4 min read Stocks Courses

Profit and loss statements

To run a business efficiently, management must thoroughly understand its financial position. To this end, accountants produce financial statements like balance sheets, cash flow statements, and profit and loss statements. This article focuses on the profit and loss statement. What is a profit and loss statement? This crucial financial…
Beginner 4 min read Stocks Courses

Understanding statement of changes in equity

Every business starts from some place, and shareholder equity plays a crucial role in the founding process. As such, whatever happens to equity materially affects the running of each business. This article explains the statement of changes in equity and why it is significant to businesses. What is the statement…
Beginner 4 min read Stocks Courses

Cash flow statements

Companies the world over maintain three primary financial statements for making sense of operations. One of those financial statements is the cash flow statement. What is a cash flow statement? During their operations, companies never lift a finger from their financial pulse. Companies face ultimate extinction if they can’t…
Beginner 4 min read Stocks Courses

Dates associated with corporate actions

Investors watch public companies closely. Every action that such a company takes can have a big influence on the direction of its stock. This article discusses corporate action and the important dates associated with the exercise. What is a corporate action? The Business Dictionary defines corporate action as a situation…
Beginner 4 min read Stocks Courses

3. Financial Analysis

Financial Analysis of a Company

Financial analysis describes the evaluation of the economic trends of a business. Usually, the purpose of this exercise is to analyse the financial health of a company.  What is financial analysis? Once a company opens for business, management must meet numerous obligations, including tax payments, dividends, and loan repayments –…
Beginner 3 min read Stocks Courses

EV/EBIT Ratio

Enterprise value to earnings before interest and taxes (EV/EBIT) is a financial metric used to ascertain how a stock or asset is valued relative to the overall industry. In most cases, analysts use the metric to determine if an underlying stock is priced too high or too low relative to…
Beginner 4 min read Stocks Courses

P/E – Price to Earnings Ratio

Price to Earnings (P/E) is a financial metric that measures the attractiveness of a company relative to its current earnings. Also known as price multiple or earnings multiple, the ratio indicates the price that an investor would be paying for $1 of a company’s earnings. Value investors use the metric…
Beginner 3 min read Stocks Courses

P/B: Price to Book Value

Price to book (P/B) is a financial metric used to compare the value of a company’s net assets relative to the prevailing share price. Market to book ratio is often used to indicate whether a company is fairly valued relative to its net assets or over/undervalued. The P/B ratio compares…
Beginner 3 min read Stocks Courses

Market Capitalisation

In a stock market, not all stocks are the same. Therefore if you want to invest in stocks, you may want to select the right stocks that align with your investment goals. In choosing the best stocks to buy, investors typically look at certain metrics to better understand…
Beginner 4 min read Stocks Courses

ROE and Its Importance in Investing

Return on Equity is a financial metric used to ascertain how effective management is in using underlying assets to create profits and value. Investors rely on the ratio to measure how efficiently management uses the money contributed. Simply put, it is a measure of a company’s profitability relative to stockholders’…
Beginner 4 min read Stocks Courses

Return on Assets (ROA)

Return on Assets (ROA) is the amount of money a company earns or the profit it generates from the assets it has invested. It is basically how a company’s assets are profitable in generating revenue. The total income of a company in a given period is divided by the average…
Beginner 4 min read Stocks Courses

Return on Invested Capital (ROIC)

Return On Invested Capital (ROIC) represents the earnings that a company gets from the capital it has invested. It is a profitability ratio that measures the returns that investors are receiving back after investing in the company’s capital. In this case, the capital here includes the total amount of long-term…
Beginner 4 min read Stocks Courses

Debt to Net Income Ratio

Debt to income ratio is a personal finance measure that seeks to compare the amount of consumers’ monthly income that goes towards the payment of debts, taxes, and fees or insurance premiums. Lenders rely on this metric to ascertain whether borrowers would be able to repay an amount they wish…
Beginner 3 min read Stocks Courses

Share Buybacks

Corporations have many pressing needs, and increasing shareholder value in the short term is one of them. What happens when revenue growth and earnings growth are not enough to achieve that objective? These corporations might resort to share buybacks. This article explains share buybacks in detail. Share buybacks, also called…
Beginner 4 min read Stocks Courses

Outro

You’ve just read every lesson in our Stock Investing course… hats off to you! By finishing this course, your investing knowledge has grown significantly. In addition to the beginner’s lessons you learned in our Stock Markets 101 course, you’ve progressed to become fluent in breaking down key company financials.
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