Four tips to finding good stocks to invest in

Julie Brownlee, Fsp Invest, 22 Jul. 2014

Tags: good stocks to invest in, investing, good stocks, stocks, investing strategy, how to find good stocks to invest in

If you’re looking to invest for the long-term, it’s crucial you buy stocks that are going to stand the test of time.

So how can you find these good stocks to invest in?

Read on to uncover four things to look for…

#1: Look for stocks with long standing, sought after brands

If you’re looking for good stocks to invest in, one key to business success are brands. Brands are a symbol that customers can identify with and rely on.

Through thick and thin, customers have a strong tendency to stay loyal to their brands, Phil Oakley in Money Week explains.

For example, think about the strength of the Coca-Cola brand. Many consumers of Coca-Cola won’t thank you for a glass of an alternative cola drink.

Brands usually take years to build. But once they make it as a recognised brand, the company can ride on this. They also tend to have huge advertising budgets to keep the brand in the public’s eye and rivals at bay.

#2: Look for stocks that produces habit-forming products

This relates to companies that produce things like alcoholic drinks and tobacco. These companies also tend to be brand focused.

Customers have a strong tendency to keep coming back for more. And that means a loyal customer base and repeat business.

#3: Look for stocks that are have a strong business association

This relates to companies that provide products that a large number of businesses rely on. Take Microsoft Office as an example.

Most people are happy using Microsoft Word or Microsoft Excel and wouldn’t thank you if their company changed this.

To change away from using software like this would involve a lot of hassle and employee retraining.

#4: Look for stocks that have patents

Patents insulate companies from competition. Companies with patents include ones that produce prescription drugs and technologies.

This means that these companies have guaranteed business for a set period of time. And this ensures strong returns.

So there you have it, four tips to finding good stocks to invest in.

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