I want to buy my first stock - educate me

Question

I want to buy my first stock - educate me

Answer 1

easy

Buy LOW

Sell HIGH

Don't be greedy, know when to take profit, know when to cut loss

Do your own homework, learn everything about company in and out, stay on top of market news, follow market trend (i.e. now we sell oil and buy financial..but that should be soon be reverse)

Answer 2

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 3

To be simple:

First do a little research on some finance sites. a good one that doesnt have any fees is the msnmoney.com one. its not the best ,but for a beginner it should be fine. Personally, if i were investing in my first stock i would look towards a reliable company that seems to have the capability to thrive in todays bear market. As you become more experienced in the investment and trading world you may try investing with more risk and larger capital, plus branching out to other markets. Keep in mind though the less risk, usually equals less return. hope this gives you a little self assurance.

Answer 4

See what is your Risk Appetite and then depending on that research for stock which will work in environment like high inflation and high commodity prices and then see which are the sectors that would work better.

Than go for researching on the EPS ( Earnings per share ) and P/E ( price isto earning ratio ) of the company and then when you see both as satisfactorily go and buy it.

I share my investments on my blog and that could help you as well and you can look into it.

Answer 5

  Read a few books like "Buffettology" about the way Warren Buffett invests in stocks, "Common Stocks and Uncommon Profits and Other Writings" by P. A. Fisher.

  Buy low and sell higher and have guts enough to buy when few are buying!

Answer 6

According to me it should be:

BUY HIGH, SELL HIGHER.

If you look at the successful investor, they don't buy cheap stocks. There is definitely a reason why these stocks are selling for cheap.

jh