Download - Advice for Picking Stocks
Advice for Picking Stocks
By Richard Kronstadt
At first, picking stocks can feel like a daunting process: With so many options, how can you
be sure that you're picking a winner? Selecting stocks doesn't need to be intimidating if you
just follow a few rules of thumb.
Identify your GoalsWhat are you hoping to achieve by investing: Do you want to supplement your income? Do
you want to save for your retirement or for your children's education? The answer to these
questions will influence the type of stocks you should pursue.
Invest in
What You
Know
Rather than relying
on popularity or
hype alone,
investing in firms
and industries that
you're familiar with
will allow you to
make educated
decisions about the
stocks in your
portfolio, such as
when to hold, when
to sell, and so on.
Keep an Eye on "Best in Breed" CompaniesFocusing on the "best in breed"--stocks with established high-performance track records or
promising prospects--will ensure that you're always placing yourself in the top tier of the stock
market.
Consider Prices
A cheap stock isn't
always a great pick,
and on the other
hand, an expensive
stock isn't necessarily
a bad choice. Take a
look at how a stock's
price has changed
over the course of the
long term before you
make any decisions.
Whittle Down
Your Options
There are myriad
options to help you
keep track of stocks
and provide you with
information about
stocks, like screeners
or ETF trackers. And
don't forget about
financial journalism,
either!