Mar
06

How to Decide What Stocks to Buy

If you are a beginning stock investor, there are certain steps that you will want to take in order to choose those stocks that you want to invest in. Just remember is that purchasing, selling, and/or trading stocks does not have to be as difficult as what many people might tell you. Just start out slowly and take some time analyzing the companies and their stocks before making your move. Here are 15 steps to consider before making your decision:

Educate yourself – read up on accounting, finance, publicly traded companies, and the stock market

Read the business section of the newspaper – better yet, subscribe to Investor’s Business Daily or the Wall Street Journal

Consider only those industries that you are familiar with – less education time means getting into the fray quicker

Think about stocks in companies or products that you like – take overall popularity factors into consideration

Research the companies you are eyeballing – get to know the company, its industry trends, and how its stock has performed in the past few years

If possible, check out the company financial statements – you will need to learn how to analyze these in order to minimize your risk when deciding on a stock to purchase

Familiarize yourself with several online investing informational websites – this will provide you with knowledge regarding a company’s:

- balance sheet
- dividend records
- growth or loss of earnings
- free cash flow
- number of stable shares
- revenue growth consistencies or inconsistencies

Decide on the amount of money that you want to risk – the first rule of thumb here is never invest more than you can afford to lose

Follow the stocks for a couple of weeks on a daily basis – this will help you decide if you want to order a specific quantity of shares or pass them up

Educate yourself on stock identification – certain criteria or information may indicate a potential price appreciation in the future

Calculate when to purchase, sell, or trade stocks – determine a method or technique for doing this so that you will know better timing on purchasing, selling, or trading stocks as well as when you should just walk away and not risk any more or your money

Consider learning how to use technical analysis – stock charts are invaluable where this is concerned, so are other tools such as candlestick charting, EMA, or MACD in order to learn and better time your entries and exits

Pay attention to the more reputable and respected stock analysts and experts – again, this is all part of your stock market investing education

Read up on all of their strategies – if a person is a published successful investor, you would be wise to read what their stock investment strategies

Think logically before you settle on the stocks you are thinking about purchasing… where are you hoping to go with your investments? Do you have a short term investing goal or a long term goal?  If you are just starting out, you’re at the bottom and the only way is up. Make sure that you always keep an eye on market trends as well.

 

Jan
19

Best Stock Sectors for 2010

Most of us realize that the economy in the US as well as globally encountered a great deal of instability. This was especially true in numerous financial markets such as those involving foreign currencies, stocks and bonds, and other types of investments. Suffice it to say, many investors were reluctant to play any of these markets as the element of risk proved to be a huge deterrent. But what about 2010? What does the picture look like for the balance of the year where investing in the stock market is concerned?

Towards the end of the 4th quarter in 2009, UBS Wealth Management has basically said that the best advice would be to stick with investing in what are called “procyclical” investments during 2010. These are investments which gain as the economy is improving and this indicates that UBS feels that the economy will recover sufficiently so that smart investors will benefit through the balance of the year ahead.

Stock sectors to pay attention to

Although there are numerous best stock sectors for 2010, there are 3 that remain high on the list and are worthy of a stock market investor’s attention:

- Energy
- Materials
- Technology

Granted, these three stock sectors have been receiving considerable attention in recent years. However, these are considered to be the three primary stock sectors to pay serious attention to.

The reason for such confidence and strong feelings towards these three stages is the fact that it has been estimated that at least 50% of the Economic Stimulus Package will be spent in 2010. Nearly $400 million will be going back into the economy. When you combine that fact with interest rates that have remained relatively low, this bodes quite well for those three sectors above.

Current economic trends that can impact stock sectors

What is not going to happen?
- The US dollar will not collapse
- Inflation will not be a significant problem
- A municipal credit crisis is not going to occur

What might happen?
- Another high-dollar stimulus package may be passed into law
- Crisis levels may arise in the commercial real estate sector
- The “Fed” may continue to remain on hold

What will happen?
- Economic recovery is going to continue
- More geopolitical threats are going to emerge
- Taxes will inevitably rise

Other stock sectors to keep a close eye on

Where the best stock sectors for 2010 are concerned, there are several others that should be watched closely in addition to the 3 that were mentioned above. These are broken down by sector and include the following:

- Basic industries
- Capital goods
- Consumer durable goods
- Consumer goods
- Non-durables
- Consumer services
- Finance
- Health care
- Public utilities
- Transportation

If you are still trying to position yourself in a financial and investment position, you should consider the above information prior to making your final decision on which sector or sectors that you want to invest in.

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