Don’t leave investing to chance, instead bet on stocks of profitable businesses: Here’s how

Don’t leave investing to chance, instead bet on stocks of profitable businesses: Here’s how

Dubai: While it’s apparent investing in stocks often involves quite a bit of analysing, especially when it comes to monitoring metrics like valuation or earnings growth, putting your money in share markets also allows you to form an opinion about how the businesses will perform in the future. “When looking to make profits by buying stocks, don’t leave it to chance like many investors often do, but instead rely on getting gains based on the strength of the businesses backing those stocks,” explained said Zubair Shakeel, a UAE-based asset manager. Stocks are a fractional ownership interest in a business, and as the business performs well or poorly over time, the company’s stock is likely to follow the direction of its profitability. By investing in stocks, you not only own an indirect stake in the business, but also in its capability to earn profits. “Even though stocks have inherently been volatile, they’re based on the earning power of businesses. As earnings rise, so will stocks, at least over time, as opposed to cryptocurrency, which usually have no basis – such as earnings or hard assets – to back their valuation,” Shakeel added. Created by renowned US investor Bruce Greenwald, ‘earnings power’