how do i choose shares?

Question

I decided that i wanted to try my luck on the stockmarket and buy shares! How do I choose a share? what are the first steps, which one should consider before making a final decision?

Answer 1

Luck indeed, at this approach you may as well pick powerball numbers for the lottery.

There are two general approaches: (1) pick stocks or whatever (you aren't ready for options) that you expect to soon rise in market value, or (2) pick stocks that you expect the company will appreciably rise in intrinsic value because of increased business done and increased profits on that business.

If you are in a gambling mood, then find out what the market is most interested in and go with the herd. The old lazy daytrader trick (not that I'm a daytrader, neither should you be, but it is a technique to scout since you are new). Look at the lists of most active and biggest gainer stocks an hour after the market opens, then an hour later. What is still on the lists, preferrably moved up on the lists, that is what you jump into (with a piece, please don't bet the farm). At the end of the day, you will see what worked and what didn't. What is still up when the account settles (and if you don't know what that means, it is still another reason that you might not be ready for this yet), you keep, and what seems to be falling you sell in order to cut your losses short.

Or you can take a more reasoned approach. Your brokerage will likely have tools. I was just checking a list from a screening I saved and here is the short list of those I was thinking about. Research them yourself and see if you see some potential for growth (don't buy into them unless you see some potential for your risk):

PDS, ITRN, BVF, and RYL.

If you don't know why, then you might as well put papers with stock symbols in a hat and pull out a few names. What does the company do (any company you are thinking of putting money into)? What is different (prospects improved, new boss, better technology at work, improved salesmen) that will affect its value? Who are its competitors (are they better or worse, and why)?

Good luck.

Answer 2

To start out with I'd recommend buying exchange traded funds that track the market. (IVV, SPY). Most traders actually do worse than the stock market as a whole, so these are relatively safe, no hassle ways to make money over the long term. Once you learn a little bit more about the market you can start picking individual stocks.

In general:

1) Buy quality companies with strong brands. Coke, Harley, and Apple may have the occasional lousy quarter, but they're not going out of business, and the fact that they're so well known makes them hard to compete with.

2) Buy these stocks when they're cheap. Look for companies with share prices going down for temporary/no particularly good reason, or that seem to be selling at lower prices/Pe ratios than they normally do.

3) Recognize that number 2 is difficult. You have to learn how to tell the difference between something being cheap because its a good value, and something being cheap because its crap.

4) Be picky. Be really picky.

5) Check out morningstar.com. They've got a pretty good website.

Answer 3

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/c8109

Answer 4

The first step is to open a trading account online. Next read their educational material. Then when you know what your doing trade the shares. You don't need to be in a hurry, there are always going to be runs, so take your time and learn what you are doing. If you don't heed this advice just go to Vegas, your odds will be the same.

Answer 5

You shouldn't. Look at mutual funds instead. Investors do much better buying broad based funds over individual shares.

The best way to invest in consistent investing. Set up a plan that every month you put a set amount ( whatever you can afford) into a broad based equity fund.

Answer 6

don't depend on luck, do your homework

go to thestreet.com or stockpicker.com

watch CNBC Mad Money and learn about how to stock valuation works, look at P/E and PEG closely and compare it to other sectors and learn about current market condition in those sectors.

there is a lot of work behind picking a good stock. if you just gonna randomly pick one you are most likely losing money.

trust me, been there done that

Answer 7

Stock picking has nothing to do with luck. You MAY get lucky a few times and think you are great but eventually you will lose.

There are several good trading systems out there - find one that suits you and get good at it.

Answer 8

choose shares

Answer 9

This website is the one you need for beginner. Check it at www.stockpickguide.com