How Do You Know What Stocks To Invest In????

Question

Their are billions of stocks. And everyone recommends the ones I have never heard of. How do I know which one would be the best stocks of the year. i am a university student and have $2000 and I at no cost can afford to lose that money. So please tell me the way the professionals pick their stocks. I need the money to pay off my education for next year and cannot afford to lose it. What numbers do you look at and how do u figure out from the millions of stocks?

Answer 1

We have to do lots of home work. Going by things or items we like May not be a good idea(no offense) coz that might not reflect the actual live condition in the Street.

Usually it all boils down to which sector you think will have a good holding atleast if not growth by next year(coz you said you want the money back next year).

I would ask you to read another blog I wrote just now for another user....

Question :What do you guys think are the best stocks in 2007? by BJ
Please see my response there to see which ones might you invest in and how to do that. Hope this helps you.
As you are new and want profit by next year I would say "Jump in hoping $1500 - $3000 back May be less but not more.(Taking into consideration that the market has already jumped 17% in 2006 and may want to take a small nap. Though Cramer says it'll be 17% more increase this year and he predicts DJA at 14500points by the end of this year.)

Do read my answer to the question from BJ. It has detailed review. Did not post it coz...it is very very lengthy and you may want to kick me if I post such a lengthier one. (hehehe0


Hope these help you.

Answer 2

Here are the general strategies:
Break up value: If a company was sold, what would its price be? If the break up value is over the stock value, then the stock is undervalued. See the movie Other People's Money on how this works.

Future growth: Ever hear the phrase, "The next big thing?" There is always future demand in something. For instance, in the next 10 years, 80 million people will have turned 65 in the U.S. There is going to be a massive lifestyle change and they are going to need and want certain things. By 2020, India hopes to be a first world nation. What are the demands going to be there? If you know the answer now, you can be rich later. Biotec stocks live and die on this belief.

Technicals: Some believe in the math and stock behavior and some call it tea leaf reading. Candle stick charts is an example of this. The Yahoo business section reporters are big on technicals.

Cycles: Stocks are like fashion and things come and go. The best time to buy a fur coat from somebody is during the hotest day of the year. Stocks work the same way and contrarians (buy with the flock sells and sells when the flock is buying) pick up on this.

Answer 3

If you have no risk capital, YOU HAVE NO BUSINESS BEING IN THE STOCK MARKET!!! If, like you say, you will need the money next year you should ONLY look for how you can earn the most interest in a fixed principle account. Or, if in a fluctuating principle account, on an investment that'll mature by the time you need the money.

If you did have risk capital one way to select stock that has been working very well for about the last fifty years is to simply by the stock with the highest RSI, with a P/S below 3.

PS: There isn't billions of stock, in the US there is "only" approx 27000 publicly traded companies.

Answer 4

I always use a couple of rules of thumb. First, what sort of stock interests me that I would buy that company's product(example, I like video games and am thinking about buying stock in Electronic Arts, I buy their products, and by doing so am helping the company-other people buy Wal Mart stock because they work there or shop there). Second keep an eye out for stocks that may have a huge future-an example there's a stock in the US stock exchange called SNMX(I forget the name of the company), but they apparently are developing a type of additive that would allow food products to taste just as sweet, but using LESS sugar- now for a company that makes sweet foods, using less sugar cuts down on costs, it's a potentially useful item for them. Third, how much risk do you want to take. If you want to be slow and steady, you can buy stock in a stable company that's been around for years(like Coca Cola) and gain slow steady gains. If you want to speculate and take risks, you can buy stocks which are risky, but could have an overwhelming return IF there are big returns. Finally, whatever you choose, research, research, research the company you want to look into. Go their website, check out their performance. Have there been layoffs or hirings? Have they been bought out or have they bought another company? There are so many questions. There's also tons of books out there, but for my money the book "Investing For Dummies" is great for learning about how the market works and what to look for. You could pick it up at www.amazon.com.

Sorry for the long verse, but when investing, there's no quick and easy way to do it. It CAN be done, but education is the key. Good luck!

Answer 5

There is no one specific way to pick stocks. In the end, it's all just one person's opinion. You really just need to do your homework and pick out the one you feel most comfortable with and that you feel will be successful. Your saying that you can't afford to lose your money at any cost....if that's the case, then don't invest. When investing any monies there is always a possibility of losing your initial investment.

Answer 6

Sounds like you have a low tolerance for risk. So, stocks may not be the best option for you. You might try mutual funds or bonds or CDs.

I'm not a pro, but I invest in companies that sell a product or service that I like and would buy. I invest in Sirius because I think they have a product I would want to pay for. I invest in Pepsi and Home Depot. That's just my philosophy. I'm still waiting for Sirius to take off in the next 5 years or so...the next big thing since cable TV, I think.

I'd recommend you get the Money Magazine annual mutual fund reviews...read up some and then call the company that you like for a prospectus.

Answer 7

Stocks are pretty risky so if you absolutely can't afford to lose any money, I'd suggest the bank. But some hot stocks for this year are Qualcomm, Stryker, Valero Energy, Google. Also read Yahoo and Amazon are some pretty affordable stocks that are expected to do well.

Answer 8

Great question ! The question that rich people would not answer.
Do you think that big exploding companies might be good investment? Google, You Tube? and the like? Microsoft? Hope you do not trust in an "enron" type. By the way when U find the answer your are looking for.......DO TELL the rest of us poor people.

Answer 9

3 rules when buying longterm shares
1)profit growth must be at least 20 over the last 3 years
2)sales growth must be at least %15+ per year
3)net profit margin

next set of rules

1)never buy when share price is on a decreace
2)Sell when price starts to fall

if your gonna invest invest in yourself

it will be worth it in the long term win investing is qite good

get the knowledge and you could make a lot of money

good luck mate

Answer 10

There used to be a research performed with monkeys, kindergardners and inventory agents. kindergardners picked the shares they knew: Disney, toys'r'us, and so forth. Stock agents did it their manner. Ststistics, and so forth. And the monkeys picked shares through throwing darts at a wall.. lengthy tale brief.... inventory agents got here in final. monkeys moment, and kindergardners got here in first... Pick shares you realize of and purchase merchandise from.