Do you know why a lot of people are intimidated at the thought of investing in the stock market? It’s because they are afraid to take risks. We all know that the economy has its fair share of ups and downs but despite its precariousness, one thing is certain, over the years, the market has remained to be an excellent medium to invest your money in. Sure, it comes with risks but as long as you know what you are doing it’s safe to say that the risks aren’t going to be that high.
If you have finally convinced yourself to invest, we assume that you at least have some basic knowledge on stock picking and stock concepts otherwise, there’s a pretty good chance you might find yourself buried in debt, God forbid. You see, there are virtually thousands of potential stocks, the question is, how will you know which of those to choose? You can’t possibly go through every income statement that’s out there, true, but you can take advantage of clever stock-picking strategies to stay safe.
The following are time-tested stock-picking strategies you can use to your advantage.
Know Your Goals
The first step that will help you select the stocks to invest is in knowing your goals. Some investors are concentrating more on capital appreciation, capital preservation and some are more focused on generating income. If you are interested in the income you should consider low-growth firms like those in the utility industry. However, if you are more interested in capital preservation you should consider investing in blue-chip corporations. Investors who are interested in capital appreciation should look for companies with various life cycle stages and market capitalization. When you’ve already set your goals you can actually combine these different strategies when picking stocks. One of the fundamental techniques in investing is narrowing your choices and when you’ve come up with your prospects you can then analyze their financial status.
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Keep Your Eyes Peeled
Investing isn’t about intuition or gut feel it’s about knowing the facts. This is why you must keep your eyes peeled on current events in the market. Expand your knowledge and read as much as you can from online financial websites, magazines and blog posts. The more you know the more confident you will be on your decision. You don’t have to do it all day. A few readings a day is already enough. Who knows, maybe reading a random blog post could be your winning ticket to financial freedom. Research has become relatively easier nowadays because of the Internet. Plus you can read different points of view from various investment professionals that will help you come up with a decision.
Look for Companies
After determining your goals your next step is to find companies that you are interested in. First of all look at the ETFs and then evaluate their holdings and learn about their previous performance. Again, take advantage of search engine sites. A quick search can be done in seconds by typing “Industry Y ETF”. While you’re at it, make sure you are using a screener in filtering stocks. Filter stocks by choosing specific features such as sector and industry. You can also check out their dividend yield and their market capitalization to gain more information about the companies. Don’t ever stop researching because reading about stocks will get you a long way. Read about financial news releases, stock analysis and other blog posts that are relevant to the stock market.
Pay Attention To Corporate Presentations
When you’ve gathered important pieces of information your next step is to focus on investor presentations. Yes, they are not as detailed and as structured as financial statements but it will give you a sneak peek and a good grasp on how they are making money. It will also give you an idea about the company’s future based on their goals and the direction they are heading.
Although these strategies will not tell you what company to invest it, it will give you vital information that will jumpstart the process. It’s going to be rough and confusing but once you have all the information that you need, you can be confident about your decision because you know that it is based on numbers, facts, and researched figures.
Looking for Stock Picking Strategies That Work?
Yes, investing can be tough and scary, but it doesn’t really have to be as long as you take the time to learn the ropes. Trust us, eventually, you’ll be in charge and be in control of your finances. If you have been looking for more information about stocking picking strategies and want something that consistently works, contact us today. Gorilla Trades is here to give you the guidance you need and help you turn your investments into consistent gains.
By Taylor Wilman