What do you look for in a stock that you want to invest in?

Question

What do you look at to ensure that the stock will go up? Please help, I am interested in investing but I don't really know where to start. Anything would be helpful. Thanks.

Answer 1

So you want to learn how to fish. That desire is better than just being given a fish. So learn technical anlysis techniques for selecting stocks. Read some books on the subject. Practice prior to investing your hard earned money. You will learn how to fish and catch the big ones.

Answer 2

I'll preface my reply with two comments. First, there are countless ways of approaching the market. Which one is most suitable for you depends on tempermant and experience. Second, a comprehensive reply to your question would require writing a book.

I keep it simple. I only go long (expecting a rise in price). I make a point of buying into the beginning of what I believe will be a major uptrend. I don't play for peanuts, if I don't find that there is a strong probability for at least a 200% gain I let it go. (my holding period is generally 3 to 5 years, big moves take time.)

It is necessary that the company has established a strong history (several years) of steadily increasing sales and earnings or steadily decreasing losses. I don't consider whether the company is currently making or loosing money particularly important as long as there is steady improvement. In order to accomplish these things you need to learn how to do a proper fundamental analysis.

The other thing I want to see is that the market at large has taken notice and is responding positively by driving the price higher on increasing volume. (price and volume are the primary indicators) Buying a few hundred or thousand shares of stock and then wishing the price goes up isn't going to make it happen. You gauge the markets response by studying charts. This means you have to learn how to perform a technical analysis as well. I start with a technical analysis and the confirm it by performing a fundamental analysis.

I have found this to be a very simple, effective, reliable and particularly safe approach. It does however require education, which takes time, which requires patience.

See if you can find someone who is experienced to act as an investing guide or mentor. It cuts down on the mistakes.

P.S. I am not suggesting a proffessional financial planner, advisor, etc.

P.P.S. This still doesn't ensure that the stock will go up. There aren't any sure things until well after the fact, and then it's too late.

Answer 3

Well first you should understand that in the stock market, nothing is certain. What I'm trying to do more and more is, before I buy a stock, I try to assess all the bad things that could go wrong with the company and try to estimate how much further down it could go in a worse case sanerio. If I don't see too much downside, then that's usually a good time to pull the trigger.

In terms of what to buy, I try to pick companies that are in good, healthy sectors of the market. I like to buy companies that I think are in areas that will experience lots of growth in the next few years.

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Answer 4

Do a lot of research and learning about a company that you want to invest in. Try to see if their product or service is going to be good in the future. Also you might want to go ahead and see the 52 week high for that stock. And try to go back further about seven years to see how it performed over the years. Good luck. May I suggest investing in gold, because gold will always hold it's value.

Answer 5

i look for stability over the long run with most of my stocks. but others i'll look for a fast growth but will not hold that as long. so it depends on the length of investment as well as the amount.

Answer 6

mutual fund is best way if you cant understand stock market.

Answer 7

buy the book.''the little book that beats the market''.............it is small and cheap and will start you out................
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