These days, it isn’t enough to just earn a salary. In order to have financial security and to lead the kind of life you desire, you must save and invest wisely. That’s why most people should seriously consider owning common stock. To some, investing in the stock market may seem like a risky proposition, but it really can be done without losing money. Success in the stock market isn’t a matter of luck, it’s a matter of analysis and skill.
Obviously you want to choose high-performing stocks with great growth potential. What characteristics do high-performing stocks possess? One essential trait to look for is a major percentage increase in quarterly earnings per share compared to the previous year’s same quarter. You compare year to year, not one quarter to the previous quarter, because there are often seasonal variations that distort the earnings picture. What is considered a major increase? Well, you want to see at least 20 percent higher earnings per share. Some investors do very well buying only stocks with a 25 to 30 percent gain in earnings per share.