In the beginning investors are confused over the overwhelming world of investing. How does one invest? What are all these jargons and investment strategies? Do people memorize all these words?
Now that you know these basics already, the next step is finding good stocks to buy. How do you select the right stocks anyway? Following your friends’ advice might just be as good as tossing a coin up in the air to guide you in your decisions.
When asking for advice, regarding selection of stocks, you have to find out what steps they took to get to that decision. If it’s merely a matter of their instincts, then stick to your coin. Seriously, there has got to be some reasons behind their choice.
Online, you would find different investment websites with their top ten picks daily or weekly. It is best that you update yourself with this kind of information. Not all of them may be financially-sound, but at least you get to see which kind of strategies they apply in their trading.
Some may have conservative approach while some are huge risk-takers. In a few days, you would be able to compare whether their predictions and strategies were effective. From then, you would be able to discern for yourself which are good stocks to buy.
Here are a few points to consider in choosing stocks:
1. Company Background
How long have their stocks been in the market? How much do their investors earn?
Are they in good financial condition right now?
Did they have any significant growth in a matter of 10 years?
Do they have any internal issues that may affect their status in the market?
2. Investment Time Period
Are you investing for a short period or for longer terms? And by long term, you meant how many years to be exact? If you are going for the long term then you might want to be more reserved in your choices or bank on those stocks with consistent growth and earnings.
3. Trending stocks
There are over a dozen list of some of the best stocks to buy in any financial news programs or websites every week. Take a look at them regularly and see which industries are doing well at the moment? Also you might consider some stocks that may have been overlooked.
Agriculture or Food stocks may not be as popular but it could sustain its production for long periods of time. People would still need to eat no matter what technological advancements may occur.
4. Financial calculators
Online stock traders offer a lot of widgets and information to help you in selecting stocks that are good to buy. Take advantage of these and use them. It comes with the service after all.
5. Keep Track of Your Stocks
Which stocks have worked for you over the years? There were a lot of apprehensions regarding investing in 2008, however, nothing serious really took place. What about in your case?
Not all situations would work for everyone. Sometimes it is best to rely on your own instincts in choosing good stocks to buy.