An easy method to invest in stocks

A simple procedure is described here

It is important to establish a minimum procedure the moment we decide to invest directly in companies.

A simple method that consists in:

Choose companies that fulfil certain characteristics

Quantify and evaluate that the companies youā€™ve chosen satisfy a minimum number of features

-Establish an investment plan and be disciplined

We will extend these concepts below. Letā€™s start with our list of characteristics:

CHARACTERISTICS:

  1. Clearly defined and consistent mission.
  2. Important competitive advantages.
  3. High growth in revenues, cash flow or dividends.
  4. Highly incentivized and competent management.
  5. Great market opportunity with high growth.
  6. Financially solid.

QUANTIFICATION:

Probably, it is difficult to find many companies that suit all of these characteristics.

In our case, if companies donā€™t fulfil at least 3 of the features mentioned above we wonā€™t even consider investing. The ideal situation would be to look for at least 5 characteristics.

How to invest, inbestMeā€™s SCOPE:

To have a disciplined investment turns out to be essential.

Once the companies have been picked we just have to invest regularly in accordance with our plan, check every quarterly the reasons why we are investing to make sure they donā€™t deteriorate and sit down to watch.

To guarantee we invest in the marketā€™s different moments, it can be as easy as adding one position per month or quarter depending on your portfolioā€™s dimensions. We can always strengthen our positions if we observe that our thesis is reaffirmed in a company already in our portfolio.

If we are successful and end up selecting 40 “good” companies in our whole life, then we can apply what Charlie Munger said:

“If you buy a few good companies, you can then enjoy life and this is a good thing.” (This in other words can be defined as ā€œsitting on your assā€).

If you donā€™t have much experience in the world of investments it might be better to start with an easier strategy.

A good recommendation is to build an efficient portfolio based on low cost ETFs that are indexed to different markets so that you get a high diversification, buying a wide selection of the worldā€™s market. This is now possible with our diversified portfolios and only from 10,000 ā‚¬. Start investing better, invest with us.

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