Companies with good products should be great investments; this sounds simple enough. In reality, this might not always be true. It is not always easy to predict if a company will be successful. You can always ask yourself: Does the company's good product range justify the price I am paying for it, and is it actually worth it? If your answer is yes, then you've found a good stock to invest in. But if you are not sure, then you should think about it.
If you buy a stock when the company is just starting to grow, your investment might already be worth more than what you paid. If not, it could take years for your investment to make money. Buying stock in an industry that is growing quickly can be risky because there is no way to know how long it will keep growing, and it might start declining, causing you to lose money.
In the sections below, we examine how companies with good products might not guarantee good returns and the factors that should be assessed by investors to make the right investment decisions.