Today's woman is not shying away from stock market, rather she is very open and enthusiastic about this investment avenue. However, stocks can be as tricky a business for novice investors as they are for seasoned players. Hence, it is imperative for women investors to heed investment experts' advice of staying away from 'junk' stocks and setting their sights only on the 'right ones'.

So how do you really separate the wheat from the chaff? Here are seven tips to help you pick a stock from a long-term investment perspective:

Tip 1: Sound management

You don't want to invest in a company where the management takes money from the shareholders to fill its own pockets. A sound management is like a captain of a ship. The onus of charting out the right direction in still waters and steering the company safely in troubled times lies on the management. To put it differently, the way in which a management behaves, determines to a great extent, the long-term success of the business.

Tip 2: Investor mentality

Develop an investor mentality and adopt a long-term investment strategy. 'Investors', unlike traders who routinely buy and sell the same stocks within a few hours, put their money in stocks for a longer time, generally at least 2 to 3 years.

While looking at the quarterly results of the company, don't lose sight of the bigger picture. Invest for a longer duration which promises more returns and is not affected by daily market fluctuations. Remember, the longer the investment period, the greater are the chances of making money.

Tip 3: Practical approach

Emotions need to be kept aside while dealing with stocks. Don't get emotionally attached to your investments. Your aim is to get maximum profits out of your stocks. It's immaterial if this is achieved through selling them, buying them or holding them. It does not make sense in holding on to a stock when it is destined to hit rock-bottom.

Tip 4: Consistently proven track record

It makes sense to thoroughly investigate the company and its track record. Consistency is the key. If the company is good, it will have a consistent performance. Its income statement will show consistent profits and its annual reports will talk about the consistent dividends doled out. Ideally, the company should have a dividend history over the past 5 years and a dividend payout comparable with its peers.

In the case of 'growth stocks', the game changes a little. The company may not distribute its' profits as dividends; rather, it would invest the profits back into the venture for future growth. However, all said and done, it should not invest so much that it has to resort to frequent financing from outside. In other words, it should not undertake frequent dilution of equity or raise so much debt that its debt to equity ratio spirals out of control.

Looking at prior records helps one understand the company's capabilities. It gives an idea, shows a direction, and helps to understand the company's vision and the path ahead.

Tip 5: Intensive research

The golden rule to investing is considering the future growth prospects of the company you are investing in. During the dot-com boom, many investors displayed a herd mentality, investing in companies without any research. The result was the dot-com bust that followed.

It is important to not only know the company like the back of your hand but also be aware of the external factors influencing the growth of the stock. The overall state of the economy, the factors influencing political and social environment should also be considered while investing. Along with that, sector growth, the demand supply trend and the competition in the sector also need attention.

Tip 6: Extensive homework

If you are a serious investor, you cannot go by intuition alone. You will need to do a lot of homework before zeroing on a particular stock. This should not be difficult. We may be an impulsive buyer, but we do have our own ways of background research before we make the ultimate buying decision.

Homework before investing would include reading up about the company you are about to invest in. This includes reading its annual reports, studying the balance sheet, analysing its profits, assets and liabilities, reading interviews of the top management, and keeping yourself updated about the latest economic policies.

In short, being the sponge and soaking every piece of news and information related to your investment.

Tip 7: Serious follow-up

Keep a constant track of your investments, regardless of the market condition. You need to ensure that the hard-earned money that you have invested are showing a promise and growing. Don't lose steam once you invest. Serious follow-up is what will differentiate you from other investors and will help you make the best of your investments.