Last Sunday, I’ve going to seminar. One of best things I’ve learned is about 7M Formula for investing in stock. I would like to share with you and hopefully I could follow this guidelines too:-
– Do you have any target? Set target on your investment. Plan on how to get ROI (Return on Investment).
– Do you want to become trader or investor?
– In my part, I think I want to become an investor. It means that I need to have passion as investor is for long term investor. Learn and study about the company. Is it the stable company for long term investment or not.
– My plan is to retire in 5 years and I hope my stock will increase and I will get profit in this 3 years.
– Do you know about the market? What market stock you buy? What type of business the company involved.
– In my part I will go to the market that I’m familiar such as property or information technology. Maybe a bit about plantation too. It is hard for me to involved in others such as fashion or metal industry.
– Nowaday, I’ve 2 stock. One stock, I’m familiar with the company but others stock is not really know as I’m follow remisier advice. I’m just waiting whether it is good stock or not.
– After this I could search some stock type that I could know their business type.
– Do you know about their company? What that company meaning to you?
– In my part, I’ve an interview with one of the company and being reject. It is impossible for me to acquired the company but I would love to have some of their share too.
– Do you know about their manager? Who is their CEO? Is it their management doing well now?
– In my part, one of company is well known and I need to do some research to know their management health.
5) Market Price
– Do you know about the company profit and loss? Do you read their balance sheet? Do you know about their cash Flow?
– In Malaysia stock, Bursa Malaysia has develop website, BursaMarketPlace too review all the information.
– I need to learn about some term such as PE, ROE, EPS, Current Ratio, Debt To Equitym. It is fundamental analysyst that more on technical.
– We need to search the stock that has discount.
6) Market Action
– Do you know when to buy? How much price and volume ? You need to look at the chart action. Whether it is UpTrend , DownTrend and Sideway Chart.
– Buy stock that in breakout position? what is breakout chart? I will explain after I’ve mastered it. Or you can read 7 Common Breakout Patterns at Ibankcoin
7) Money Managemet
– This is important for investor. You need to have trading plan.Know when to buy and sell. If you get profit never forget to pay zakat. 2.5% is the amount you need to pay for Zakat after get profit and 0.1 for broker fee.
That’s 7M Formula and I’m ready to follow it. Nowaday I’m trying to gain more capital. If you want to help me, just donate some cent to my paypal zzarizi [at] yahoo.com.
The Formula by Asri Ahmad