Investing to become financially independent
Investing to become financially independent
Valuation ratios are essential financial indicators for assessing the relative cost of a stock and making informed investment decisions in the stock market. Beyond just the price of a stock, it is crucial to analyze fundamental elements such as revenue, earnings, and dividends to determine whether an investment is truly worthwhile.
The Price Earnings Ratio (PER), although widely used by investors, has several limitations, particularly regarding the possible manipulation of earnings and its retrospective nature. Despite its drawbacks, this easily accessible indicator remains a good starting point for financial analysis, but should not be used alone to make investment decisions.
Discover why dividend yield should not be the only criterion to consider in your stock market investment strategy. Learn how to avoid common pitfalls related to an excessive focus on yield and understand the tax implications, particularly in Switzerland where dividends are taxed unlike stock market capital gains.
Discover the secrets to assessing optimal dividend yield and avoiding common investment pitfalls. Learn how to use the payout ratio as a key indicator to select stocks with sustainable growth potential, while maintaining a balance between safety and profitability.
The price-to-book ratio is a valuable indicator for value investors, measuring the relationship between a stock's price and its book value per share. Although some question its relevance in the Internet age, this analytical tool remains particularly interesting for identifying investment opportunities, particularly through NCAV and NNWC strategies.
The price-to-sales ratio is a valuable stock market indicator that relates a stock's price to its sales per share, providing a relevant signal for buying and selling decisions. Less subject to accounting manipulation than other indicators, it is particularly effective for evaluating both small and large companies, including those that are not yet generating profits.
Discover the price-free cash flow ratio, a financial indicator favored by Warren Buffett and considered one of the most reliable for assessing the financial health of a company. This ratio, which divides the stock price by the annual free cash flow per share, provides a more accurate picture of available cash flow while minimizing the risk of accounting manipulation.
Learn how to navigate economic sectors to identify undervalued companies and unearth investment opportunities. By focusing on growth industries and exploring beyond geographic boundaries, you maximize your chances of success in the financial market.
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