How to Make 1000 pounds a profitable Investment in UK Stock Market Essay

How to Make 1000 pounds a profitable Investment in UK Stock Market - Essay Exampleb. Acting on rumours shrewd that it is in fact a rumour. c. Buying Dividends for long-term investment in bloodline market. It is a permanent and less risk of exposurey way of earning profit. d. Opening an account with a broker. e. Investing in Penny stock to earn profit. Method 1 Basic Plan The counterbalance regularity is to look for companies that ware undervalued ratings. This method does have it perks considering that undervalued firms have a lot of value, of which general public is unaware, due to rating agencies (Graham, 1985). Now the scratch line scenario is an investor having ?1000 and he or she has to make notes through investing it in stocks looking for undervalued companies. The first reasonable involvement that the investor should do is to look into companies, which have the least value on the FTSE index. For example, the investor comes up with quaternary companies, whose stock v alue is ?2, ?3, ?3.50 and 3.75. Initially, I will analyse why that particular follow is undervalued, does that company have large debts that it needs to pay, or the company has a record of bad investments or if the company was indicted in law-suits involving fraud etc. If the company has large debts, the investor shall see the prospects of that company paid off the debt while pragmatically and logically calculating, the duration in which the company will be able to pay its debt. If the investor wants to earn the m onenessy quickly i.e., in a week and he or she is able to find a company that can pay off its debt in two weeks, it would be best to buy stock of that company. And if the prospects of paying debt are low, the investor shall not invest in that company because of the obvious downfall state of the company. One thing that shall be kept in mind that, one must(prenominal) not sell all the shares if there is a slight rise in stocks because of the thought about, being on the s afe side. One must project a slight confidence by observing the location of the market towards that company if that attitude is confident towards it then theres no need to sell the price and if the attitude contains deficiency of confidence, then one must sell shares at the price offered as earliest as possible, if one wants to liquidize stocks instantaneously. some other way is to invest it, in two or more companies at a time. The approach shall be the same as above and the reason to invest in two or more companies at a time is unreliability in any one company. Its on the button an alternative because companies are being kept undervalued for specific reasons. Sometimes the reason is right and justified in view of the person who wants to invest, but not always. This is a good way to earn currency, but the chances of earning money quickly are very bleak. Drawbacks The biggest risk involved in this kind of investment is, in show window undervalued company puffs further devalued because in such cases the value of stocks further decrease, resulting in loss for the shareholders. Another drawback of this plan is lack of experience of the investor who is investing the amount of ?1000, which is a high value. It is very important that a person should be an experienced investor person while investing because then there might be rational discussion taking place instead of decisions made on gut feeling. Another risk here is of fraud and being conned, which is very common for new investors. A new investor might get caught because of his or her