commerce Bahrainthismonth.com February 2024 27 What Do You Need to Look For? These are the terms that I like to look at: P/E ratio which is the current price of the stock divided by its last listed profit. Look at this along with the PE ratio of the peers of that company. If the average P/E of the industry is higher than that of the company, you have one tick mark in place. Next, debt coverage ratio. Too much leverage is rarely a good thing. Most companies however have debt. Again, compare with the industry average and you will get an idea of how good or bad its level is. Next, I like to look at the shareholding pattern. Companies that have too much control with few sets of people, and too few shares available to public are better avoided. Finally, look through news articles and comments on websites around these stocks. It’s a treasure trove and will give a good indicator of the future and reliability of the company. What are the Alternatives? You most certainly can invest, and that too at a very small price. When I say this, I do not mean you need to hire a broker or advisor. What I do mean is, invest in Exchange Traded Funds (ETF’s) of a specific country if you do not belong to that country. Or, invest in mutual funds that target specific sectors that interest you. Or, in mutual funds that invest in the blue chip (top stocks) companies. These decisions are based on your risk and return appetite. A blue-chip stock usually gives modest returns, mid cap stocks have higher returns and small cap, which bear the highest risk, they have the highest returns too – if you choose right. Investing can seem like a daunting task. Yet, with information and technology, it’s a lot easier than most people realise. Today, you can invest using easy to use global platforms like Interactive Brokers or a good online platform specific to your country. What it does need, is an interest in business, in making money work for you and in not being too afraid. Invest in a sector and company you understand, know your risk appetite, know when to sell and book profit and knowing when to stay invested. Simple advice, but, often difficult to implement in totality. Give it a try, you may find it more interesting than you think. Pria is an experienced business consultant who works as a business coach and advisor helping clients with their strategy, business plans and idea assessments. You can follow Pria on Instagram using the handle @guide¬_my_idea. Ramadan Kareem Celebrate the Holy month together with family & friends Group Discounts & Private Venues Available Iftar | Ghabga Grand BD 15* per person *TAXES APPLY RAMEEGRAND.BH RAMEE GRAND HOTEL AND SPA | SEEF FOR MORE INFORMATION : +973 36897379 / +973 17111999
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