Know Your Assets

Because stocks merely represent the claims that an investor has on a company’s assets, you should know what external conditions might affect the value of those particular assets. These external conditions refer to factors occurring outside the direct control of the company or its management structure. Increasing cases of swine flu, for instance, had a detrimental affect on the value of stock for companies whose primary source of income is pork distribution. In this regard, identifying good stocks to invest in requires keeping an ear to the ground for relevant information that could directly affect a company’s assets