First step: outline a circle
Investment advisers do not recommend that novice investors buy securities with low turnovers. There is a risk that they will not be sold quickly. Each expert has its own criteria for assessing liquidity. For example, Anna Lyukanova, an analyst at Alora, does not recommend buying securities with daily turnovers of less than $ 10 million. The criteria for evaluating Finam’s investment consultant, Andrey Stopunov, are even stricter – he believes that at first it is worth choosing securities from only out of the 50 most liquid ones.
Second step: select the sector
Having outlined the range of prospective investment objects, you can choose specific securities. Numerous analytical reports, some of which are published free of charge, and others are distributed by brokers between their clients, contain forecasts for the sectors. For example, Troika Dialog in its June review predicts growth in the infrastructure sector (oil service companies, construction companies and heavy engineering companies), the oil sector, and transmission and distribution companies.
Step three: choosing paper
How to select specific companies in sectors? You need to compare the market price with the fair one. Current market prices are considered to be influenced by supply and demand and are therefore subject to fluctuations reflecting momentary market sentiment. The fair price is calculated on the basis of fundamental data and tells how much the shares will cost if the emotional factor is excluded from the market price. For example, in the oil sector, Lukoil has one of the highest growth potential – 38%. The fair price, according to Troika Dialog’s estimates, is $ 73. And the current one is $ 53 (1662.95 according to the results of trading on the MICEX on June 17). Having estimated fair prices, we study the news background, trying to find the so-called drivers – news that can affect the price. For example, about mergers and acquisitions.
Fourth step: finding a moment to enter
If the paper itself is selected using fundamental analysis, then the moment to enter is best determined using technical analysis. “The simplest and most correct thing is to draw a trend,” Anna Lyukanova is sure. To understand what is happening, she also recommends evaluating trading volumes. For example, during the last three weeks the volumes of Lukoil shares were growing, the trend was upward. Lyukanova and Stopunov, without saying a word, recommend learning how to draw the so-called “moving” – the average and 21-day. The problem with this tool is that it gives false signals if there is no pronounced trend in the market.
Fifth step: determine how much we invest
Portfolio theory was formulated back in the fifties of the last century by the Nobel laureate in economics Harry Markowitz. The essence of his approach is that the return on securities is considered as a random variable, while the mathematical expectation is an analogue of the expected return, and the standard deviation is a measure of risk. Taking this theory into account, Otkrytie’s investment consultant Boris Blokhin does not recommend that a novice investor invest more than 15% of a portfolio in one security.
Sixth step: finding the exit point
Stopunov recommends to determine in advance the price of the shares, upon falling to which they will be immediately sold. Within the framework of the established corridor, he recommends to be patient and not waste time on trifles. True, this is not always easy. Researchers of the theory of chances agree that on the Russian stock market, like nowhere else, there are many factors that can change the trend at lightning speed (for example, Putin’s proposal to send doctors to Mechel, which in two days brought down the prices of securities of this company by 45.6%) …