Till now, we have curated a list of top companies with their value, followed by selecting and purchasing the best stocks from them. Now, we come to the last stage, i.e., analyzing whether to invest in the companies for the long term or not.
In this step, we proceed with a critical analysis of how profitable it will be to invest in the company for the long term. Now, this step is the trickiest among all, as it involves a lot of factors. The factors range from the financial standings of the company to how good the stock has performed so far.
If the price of the stock goes high enough, we start making profits. We keep the capital there and keep securing the benefit for as long as we want. On the other hand, if the stock performs bad, we purchase more stocks so that the overall price per stock dips and we acquire a strong position.
Additionally, if the CEO starts performing bad, we sell the stocks to avoid failure and financial risks. The process reduces the risk of enormous losses, and with this, we finally achieve our long term investment goals by identifying the right stocks.