If you’d like to do more with your money, investing in stocks is a great way of using it to generate more money. If you’re a beginner investor, you’d do better investing in a portfolio or a group of stocks selected by a professional. If you’d like to pick your own stocks, here’s how you can go about it.
- Have an idea of the industry to which the company belongs – Find out if the company you’re investing in is well-known, it’s history, if it’s new, like a startup and so on. See if regulations on the industry can affect future prospects. A company’s history will also tell you if it’s adaptable to change and so on.
- Have a look at the company’s required report of its financial condition to regulators – The Nasdaq (National Association of Securities Dealer’s Automated Quotation system) has recommended doing your research on the financial as well as other corporate information required by and filed with the Securities and Exchange Commission, the U.S. stock regulator. There’s an online database of these filings known as EDGAR. There are also plenty of sites which will let you look up a company’s financial reports as long as you understand the company’s corporate stock trading symbol. The quickest way is to look up a company’s website and search for its investor’s page. This is where information that’s important to investors is kept and maintained, and you certainly will find what you’re looking for here.
- Have a look at the company’s weighted alpha – If you’re doing your research on a company online, you can look at its weighted alpha numbers. The weighted alpha figure shows you the company’s growth during the year while emphasizing the company’s most recent price activity. A negatively weighted alpha suggests that the stock price is moving downwards while a positive weighted alpha says the opposite.
There are many more tips for researching stocks. Start by following these and then branch out.