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Entering July, the market recovery predicted by the teachers at Jiu Fang Zhi Tou is turning into reality. This is something that is very exciting for all investors. The recovery of the Chinese stock market that began last week saw significant increases in all three major indices. There was active capital inflowing into the markets, trading volumes rose as well, and the total market value increased substantially; hundreds of stocks reached their daily price limits every day. http://www.ushunde.com/data/attachment/forum/202007/28/111349ztmfuco898yyq9qy.jpg.thumb.jpg As the A-share market saw overall gains, many investors took notice and joined the investment rush, hoping to benefit from this wave of prosperity and share in the profits. So, given such market conditions, how can one make accurate investments to ensure that their wealth increases, and avoid ending up with nothing at the end of the day? Next, a teacher from Jiu Fang Zhi Tou will share with you how to make the necessary arrangements. 01. Analyze the company’s financial records related to its continued operation. A mature enterprise must have gone through a full cycle of growth; only by understanding its performance during periods of economic prosperity as well as in times of economic downturn can one grasp the company’s business philosophy and its overall governance structure. It is best to have records available for review spanning 5-10 years or more. Therefore, the teachers from Jiu Fang Zhi Tou remind everyone that an important aspect of stock selection is to choose good companies; thus, the ability to withstand economic fluctuations and operational stability are crucial for a company. 02. Analyze the enterprise’s internal value growth rate. The instructors at Jiu Fang Zhi Tou often emphasize that the enterprise’s internal value growth rate is very important, as this figure is simple to determine yet is frequently overlooked; nevertheless, it represents a crucial indicator of a company’s performance. Different companies and industries use different criteria for evaluation; for example, bank stocks are assessed based on the growth of net assets, while internet companies should focus on the growth of net profits. For technology companies, the growth in operating revenue can serve as a reference indicator. 03. Metrics for measuring a company’s ROE Generally speaking, an return rate of 15% is considered good in capital-intensive industries, while in asset-light industries, a return on equity of over 30% is regarded as excellent. Therefore, the evaluation criteria for the ROE indicator vary from company to company. Teachers from Jiu Fang Zhi Tou pointed out that if a company’s ROE can remain at a leading level within its industry over the long term, it indicates that such stock is one of the leading stocks in that industry. 04. Choose industries carefully The industry to which a stock belongs is actually very important. Because certain industries, due to rapid technological innovation and expensive production equipment, require substantial and continuous capital investment. Therefore, the teachers from Jiu Fang Zhi Tou also remind everyone once again: it is important to understand the industry background; if a company’s gross profit and net profit are restricted due to industry-related factors, it is not a good choice for us when selecting stocks. Currently, the soaring stock market is attracting retail investors to rush in, but irrational investing is never a good choice. For those new to investing, it is safer to make decisions with the help of investment advisors. As an expert in the investment advisory industry, Jiu Fang Zhi Tou has numerous successful investment cases to its credit; it can help stock investors weigh the pros and cons and make informed decisions. Everyone is welcome to come and seek advice.