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How to Research Stocks
Where to Look
These days, the problem isnt so much where to find information,
but which resources to choose from among the millions of print,
broadcast, and online media available.
Research Factors
The following are factors to look for when researching a stock:
- Lasting trends: dont fall for the flavor of the
month, 6 months, or even the year.
- Growth-oriented industries: for example, based on aging
demographic trends, its reasonable to believe healthcare
and pharmaceutical industries will perform well in the future.
- Go against the grain: take a look at which market sectors
are out of favor and find good buys that you believe will
rebound.
- International politics: a presidential election or governmental
coup can make or break a countrys economy, so if youre
considering any foreign investments, investigate the regions
internal stability.
-
Rising popularity: if a company is already overvalued
and doesnt have the balance sheet to justify its inflated
price, pass on it even if your neighbor claims hes
making a killing.
- Buying from the inside: when you see companies buying
up their own stock, its often an indication of its
confidence in management and product or services and that
its poised for larger market gains.
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