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Less risk, more profit
Whilst some investors have a significant investment in the stock market, often with a comprehensive, well-managed portfolio, for most smaller investors, their experience of the market is limited to one or two companies and they are therefore more open to stock market fluctuations and risks. Company share prices can be affected by many external factors, often beyond the company's control and, unless you are watching the market carefully day by day, you usually have to hold onto your shares for many years in order to turn a good profit.
By contrast, if you select the right land, or take the advice of a reliable land agent, you can realise potentially fantastic profits in a much shorter space of time. This is because the land that's normally made available to smaller investors has been carefully chosen. Big land investors buy and then bank land that they think will be ear-marked for development in the future, and then either hold onto it, or parcel it up and sell it to private investors, who reap the benefits if planning permission is granted at a later date.
No maintenance required
Once you've bought your piece of land, you own it outright and can sell it whenever you choose. You don't need to maintain it as you would a property and you don't need to follow its fortunes day in, day out, to find out whether you're making any money. If you need to raise money, you can sell your land quickly, whereas if your shares are at a low price, you won't be able to make enough cash.
The best of both worlds
If you have thought of investing in land, but don't want to get out of the stock market completely, then just broaden your portfolio by reducing your shareholdings and investing in land as well. You get the best of both worlds, and the chance to make a very health profit if you choose the land wisely.
The daily press, together with a whole host of websites carry prices and other basic information about stocks and shares. On their own and collectively they offer valuable pointers about how the company is performing, how it s viewed by the market and what its future prospects are. Whichever financial website or newspaper you choose, the format the information is shown in is fairly typical and is explained below.
The name: First of all, the company name is given or an abbreviated version if there is insufficient room. The stock will be quoted with its peers either by sector e.g. banking if it is a comprehensive list of shares or by indices e.g. FTSE 100 if only quotes for the top companies are provided. Being listed with the same type of companies means you can compare its performance to that of similar organisations and lets you select stocks by sector or size.
The price: The share price is the price at the close of the previous trading session and is quoted in pence. This is the mid-price and not the price at which the share could be bought or sold and there will always be a margin between the two. For illiquid stocks and/or smaller companies, the actual buy/sell prices could be a significant percentage away from the mid-price.
Price Movement: The movement in pence is given as the difference between the closing price in the previous column and the prior days closing price. Alternatively, if the share price is in a weekend newspaper, the movement is likely to represent the price change over the previous week.
Price highs & lows: The next bit of information is the closing prices of the shares highs and lows. This might be for the calendar year to date or for the previous 52 week period. If you factor this in to your share trading criteria then make sure you determine which period the data covers so you properly assess where the current price sits in the trading range. Remember this is quite a crude indicator because if price movements is one of your key factors then charting or technical analysis is likely to be more appropriate.
Market Capitalisation: The market capitalisation is the stock markets value of the company and is calculated by multiplying the number of shares in issue by the current market price. Depending on price volatility the value of the company can vary considerably from day to day. The capitalisation will be quoted in millions.
Dividend Yield: The dividend yield will be quoted gross and will be calculated by taking the gross dividend paid by the company and dividing it by the current share price. Both are in pence and the yield is expressed as a percentage.
Price / Earnings ratio: Known as the p/e ratio and is perhaps the most important share price ratio for comparing shares (ideally in the same sectors) and will be discussed in detail in a later article. It is calculated by taking the share price and dividing it by the company's earnings per share. The calculation of earnings can vary but is usually profits after taxation.