What stocks should I invest in?

You'll be surprised with this answer

Welcome To The Long Wealth Newsletter (August 22nd). (est. 4 min read)

In today’s newsletter we will go over:

  • Focus on companies with strong, consistent cash flow and low debt

  • How to make consistent gains in this market

  • Some chart analysis

  • And much, much, more..

Actionable Tip Of The Day

Focus on companies with strong, consistent cash flow and low debt.

Here’s what to look for:

  • Company’s cash flow statements over the past few years

  • Check their debt to equity ratio

  • Compare these metrics to other companies in the same industry

  • Get Insights From Experienced Investors In Our Free Community (link)

  • The Best Investing Strategy Of 2024 (link)

  • Join The Waitlist To Find Undervalued Stocks With This Screening Tool (link)

  • You Need This Free Charting Tool If You Want To Perfect Your Buy & Sell Decisions (link)

Deep Dive

Why do we want to focus on companies with strong cash flow and low debt?

  • Financial stability:

    • Strong cash flows indicate a company can cover its operational costs and investments without relying on external financing.

    • This stability helps companies survive economic downturns when credit might be scarce or expensive.

    • It also provides a buffer against unexpected expenses or market shocks.

  • Growth opportunities:

    • Excess cash allows companies to invest in growth or make strategic acquisitions.

    • They can fund research and development, expand operations, or make strategic acquisitions.

    • This self-funded growth can be more sustainable and less risky than debt-fueled expansion.

  • Lower risk:

    • Less debt means lower risk of bankruptcy during tough times.

    • It also means less risk of bankruptcy or forced restructuring if revenues decline.

    • Lower debt levels often translate to more stable stock prices during market volatility.

  • Flexibility:

    • Strong cash flow gives companies more options in changing markets.

    • They can take advantage of opportunities that arise, such as acquiring distressed competitors.

    • This flexibility can be a significant competitive advantage in fast-changing industries.

  • Value preservation:

    • These stocks tend to be less volatile during market turbulence.

    • Investors often flock to these "quality" stocks during times of uncertainty, providing price support.

  • Potential for Higher Returns:

    • Over time, companies with strong financials often deliver superior returns with lower risk.

    • They're better positioned to compound their advantages over competitors.

If you enjoy these types of emails more, let me know in the polls.

Darold Trinh

Long Wealth Newsletter

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