Picking a correct stock that can give you profitable returns is a huge exercise. While many people trust on advice of friends and family, it is the most riskiest way to invest. So before you buy a stock, ask these 10 questions and check the answers and then only decide.

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1. Who owns and runs the company?

Before you put your money into any stock, check who is the owner and who are the managers who run the company and take important decisions. If any of these persons has a bad image then it's better to stay out from that stock.

2. Business of the Company

At times while buying stock, many people just look at the share price while it is important to know and understand what are the businesses of the company. If a company sells watches but is also active in business of soap making then you will have to dig deeper as this kind of absurd expansion doesn't make sense and makes the stock unstable.

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3. Debt of the Company

All companies have debts, but it is important to check last 5 year figures to compare how much increase or decrease has been resulted due to workings of the company. If debts are not paid and are only increasing day by day then even if the sales and profits are rising, such stocks are very risky and can fall on their face anytime.

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4. Competition

Who are the company's competitors and does the company have any advantage over it's competition. Because in the long run this point matters a lot.

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