Stock Picking Pointers
A Few Things to Consider
1.) Decide Whether You Are Going To “Invest” or “Trade” a Particular Stock
Come up with your time frame strategy before you buy. Is this a stock you are going to buy and hold like Warren Buffet? Or is it going to be something you dump as soon as you make X%? Having a game plan beforehand can help you avoid making the wrong decision based solely on emotions when the pressure is on.
2.) Look For Stocks That Pay Consistent Dividends
Dividends are a sign of positive financial health.
3.) Consider Using The Peter Lynch Style of Investing--Look for what you know, understand, or use. Instead of investing in “hot stocks” or relying on “tips” invest in your “world”. That is to say, invest in the products and services you use on a consistent basis. If you eat a particular brand of cereal, consider buying some shares in that company’s stock. If you only buy particular brands of cars, buy that stock. If you bank at a certain financial institution, own shares of that company. Perhaps you are a delivery driver for example. You notice that one business you deliver to everyday is increasing activity and business is pouring in. Do some research and find out whether buying stock of that company might be a good idea. Many trends can be spotted early from just such casual observations even before the pundits of Wall Street get wind of it.
4.) Look for Companies With Little Or No Debt
5.) Look for Companies With High Insider Ownership/Insider Buying
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