How to pick stocks for long-term investing P/E ratio. A ratio between 15 and 25 is often considered healthy. ... P/B ratio. A good range is typically between 1 and 3, showing a fair valuation. ... EPS. Look for companies with consistent or growing EPS over time. ... ROE. A good ROE falls in the 10-20% range.
The 7% rule is a straightforward guideline for cutting losses in stock trading. It suggests that investors should exit a position if the stock price falls 7% below the purchase price.
The rule stipulates investing 90% of one's investment capital toward low-cost stock-based index funds and the remainder 10% to short-term government bonds.
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