How do you decide which stocks to invest in?

Question

I'm relatively new to stocks, bonds, and other investments, but would like to find out more about them. For a beginner, what suggestions do you have on educating a person on and actually making investments.

Answer 1

a couple things...if you watch TV, Jim Cramer [Mad Money on CNBC] is actually a real no-nonsense advisor...don't _react_ to what he says, but try to listen to his broad advice...

that said, you'll need to decide

1) what type of investor you are [value, growth, income]

2) your tolerance for risk

3) your horizon for profit/loss

work on those things to start with

Answer 2

Your best bet unbiasedstockanalysis.blogspot.com  ask about any stock for free.

Answer 3

I'm not a expert in stocks but i do know some things about investing in them. depending on how much money you would like to invest go for newer companies, unless you are looking to invest in companies like coca-cola or in gold or something. before investing into them you should do some history on it...see who is in charge of them...see if they have ever bankrupted another company how much money they have made etc. if you are investing small amounts just to get used to the stocks try to invest in companies that you think will make it big, such as new technology companies with unique devices etc. anyways i hope i helped and good luck  

Answer 4

identify your investment style, including your long-term (or short-term) goals. know your risk profile, your time horizon, liquidity needs, and any other specific relevant info.

maybe try being an event-driven investor. you identify some macro type trend, like for example, all the rural people moving into the cities in china. so that points you towards investing in china. so you have a notebook w/a heading 'China'.....then you start to do your research and keep notes, and always refer to your basic tenets of your investment profile and needs.

Or keep notes based on sector. do you do fundamental analysis? yes, if you're in it for the LT. if you have a section in your notebook that keeps 'hotlisted' stocks ...have a column of important financial ratios that you always fill out to give you some perspective on how healthy these companies really are.

you'll get more ideas jsut from reading the WSJ and other good sources of info, but don't spend too much time worrying about HOW you're going to organize your investment thoughts, but rather WHAT your ivnestment thoughts are. spend more time learning than organizing. although organzing your thoughts is obv. important.

you can look up some small cap mutual funds, and then, on morningstar for example, you can look up their holdings. or also check on www.sec.gov for their filings which would provide some idea of what they're investing in.

there are more sophisticated tools out there also where you can screen by size, etc but they tend to be expensive. bloomberg is the best one out there but it costs like $30K a year.

Answer 5

Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.

Here is some reading material that can get you started in the right direction, The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki

Then try some of these

What Works on Wall Street by James O'Shaunessey

Beating the Street by Peter Lynch

One Up on Wall Street by Peter Lynch

The Warren Buffett Way by Robert Hagstrom

How to Make Money in Stocks” and 24 Essential Lessons for Investment Success both by  William O’Neil

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance.  (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why.  This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are

Investopedia - http://www.investopedia.com/  Stock Charts - http://stockcharts.com/

http://www.investorshub.com/  http://www.1source4stocks.com/



Visit some of the more professional websites like Zacks - http://www.zacks.com/

Smart Money - http://www.smartmoney.com/  Schaeffer’s – http://www.schaeffersresearch.com/

Some of these web sites will have advertisers who are worth looking into also.  And remember, if they offer free information, get it.

Good luck, study hard and you will do well as an investor

Answer 6

You could try top down:

Which country do you want to invest?

Which market?

Which sector?

Best stocks in that sector?

Best management?

There's your stock/s

Answer 7

Investopedia gives you the terms.

It really is based on your style.  I'm long term so news and formulas don't do it for me.  I have to visualize what the company is going to look like several years down the road.  One could have picked up XOM for under $20 (during most of the 1980s under $7)  for most of the '80s and '90s and sold for as much as $96 this year.  All one had to do was believe there would be another energy crises.