How to proceed with the selection of shares?

In the long run, the key pillar of success is the right diversification. Expecting a single firm to yield some potential return at the same risk as a diversified portfolio is highly unlikely. Even investment legends like Warren Buffett always emphasize the need for risk spreading.

Any new investment position should be opened on the basis of a thorough analysis that shows that the firm is trading below its fair value while having the potential for long-term growth. The current price correction of 20 to 30% for leading technology companies emphasizes this strategy even more.

For some investors, a sharp drop in prices may cause concern, but in reality, this is the moment when emotional decisions should be replaced by a rational approach. If you take advantage of the current situation to buy quality shares, your capital can appreciate just by returning the price to its original levels, without the need to reach a new high. [1]

Which companies have the greatest potential?

From our point of view, it is advisable to focus on Alphabet (Google), Amazon and Microsoft. A trio of technology leaders who have long been among the best-performing companies in the US Nasdaq 100 index. Their products and services are an integral part of our daily lives, providing them with a stable foundation for growth. [2]

Why these titles?

Companies such as Alphabet, Amazon and Microsoft are characterized by extremely strong fundamental conditions. They have a low level of debt, which gives them more flexibility in managing and investing. At the same time, they achieve stable growth in sales and net profits, which confirms their ability to generate value for shareholders in the long term. Last but not least, strong free cash flow is also an important factor, allowing them to innovate, expand their operations within technological trends and maintain a competitive advantage. [3]

The fundamental situation of these companies remains solid and unchanged, with only their price change, which today represents an attractive entry opportunity. It's like buying your favorite shoe model. We buy when there are discounts, right?

[1], [2], [3] Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which is subject to change. These statements do not guarantee future performance. Forward-looking statements involve risk and uncertainty by their nature because they relate to future events and circumstances that cannot be foreseen, and actual developments and results may differ materially from those expressed or implied in any forward-looking statements.   

Warning! This marketing material is not and should not be construed as investment advice. Data relating to the past are not a guarantee of future returns. Investing in foreign currency can affect returns due to fluctuations. All securities trades can lead to both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which is subject to change. These statements do not guarantee future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., regulated by the National Bank of Slovakia.