The market is overwhelmed with shares awaiting purchase. This makes it easy to find and buy franked dividends stocks. However, getting the right one to buy while lacking a time-tested approach is not as easy. You first need to conduct your research on the market to ensure you are making the best purchase.
The stock market is just recovering from the adverse effects of the COVID-19 pandemic. This has shown confidence that the economy will soon recover from the pandemic and go back to being fruitful. It is worth noting that no one knows when the stock market will experience a crash. However, astute investors know that a sudden decline in stock prices often avail a great opportunity to purchase quality franked dividends stocks. The best stocks to buy can be obtained at bargain prices when the market is undergoing correction. These stocks usually trade at substantial premiums when the market is flourishing.
Crucial Ingredients when looking for the best franked dividends stocks to buy
Plenty of stocks is trading on the NASDAQ and NYSE. But you are looking for the best franked dividends stocks to buy that will generate immense profits. When you incorporate the CAN SLIM system, you will acquire clear guidelines on exactly what to purchase. The CAN SLIM system is an abbreviation for the following stock related terms;
- Current quarterly earnings
- Annual earnings growth
- New product/service/management/price high
- Supply and demand
- Institutional sponsorship
- Market direction
Make sure you are investing in franked dividends stocks that have at least 25% growth on the recent trimestral and annual earnings. Look in the direction of the businesses with new, trending products and services. You can also ruminate over the non-profitable companies generating remarkable revenue expansion.
Keep track of the supply and demand of the stock to buy while focusing on the leading stocks in large industrial groups. This will enable you to target the franked dividend stocks with strong influential backing.
Once you identify the stock fitting the criteria, refer to the stock charts to devise a good entry point. But first, you should hold on until the stock forms a base and then buy as soon as it hits a buy point, preferably in substantial volume. Oftentimes, a franked dividend stock hits an ideal buy point after breaking the initial high on the base’s left side.
The M when looking for the best franked dividend stocks to buy
M is for market and is a major part of the CAN SLIM guidelines. Most franked dividend stocks, including the very best, follow the direction of the market. You can only invest when the stock market confirms an uptrend and sell when the stock market is in correction.
Now is not the time to find the best franked dividend stocks to buy given the recent outlook on the market. It is a perfect time to raise cash, particularly if you are exclusively off the margin. You should begin with trading off the stocks with the weakest performance. However, if you have a strong conviction on a stock as well as a profit cushion, you can hold through the correction phase. You must stringently follow sell signals to prevent painful losses.
If the stocks are lower than 7% below the buying price, consider selling them. Make sure you remain watchful on the stocks with a steady rise of 50-day/10-weekly averages. It is also ideal to build a watchlist of significantly strong stocks that have impressive technical setups. You are reminded to remain disciplined while following the buy and sell rules.
Venturing into the stock market can be a tricky business if you don’t know how to maneuver the market. There are times when the market experiences a decline and when it hits. You should be able to understand this to avoid hurtful losses and when to rise again.