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Friday, 29 June 2007

5 Vital Tips About Stock Market Research

by Roger Overanout

When you first consider investing in the stock market it can seem to be a very intimidating prospect, one of the most important things that you have to do is research into the stocks you're considering investing in.

The following five vital tips about stock market will help you.

1. The saying "knowledge is power" is exceptionally true when it comes to being successful at stock market investing, it is vital to find out as much as possible about the company you are considering investing in and developing an understanding of the factors that affect the profitability of that company, here are two freely available resources where you can obtain this important information.

(a) The financial press, by studying newspapers such as the Wall Street Journal or if you come from the UK, or want to invest in UK Stocks, the Financial Times, you will be able to keep up-to-date on all the latest information that might affect the stocks you are considering. Also these newspapers provide quality in depth news about politics and economic trends etc that could well affect the profitability of the stocks you are considering.

(b) The Internet, almost everything you could hope to find about any company and its stock is available somewhere on the World Wide Web, learn how to use Google, Yahoo and the other search engines, visit the website of the company whose stock you intend to purchase it will provide you with a wealth of information, probably including company balance sheets, trading statements and anticipated developments in the company.

2. There is so much information available today, but you must make sure that you review everything in detail, not all information will be accurate so make sure that you consider everything carefully. It can all be a little overpowering, but take the time to check everything out, read the small print, if you have any worries or concerns about a particular stock dig deeper until you have all the information you need to make an informed decision. Remember there is always another stock market investment available, if in doubt choose another company stock.

3. Consider external factors, is this the right time of the year to be investing in this company, are there seasonal considerations, the best time to invest in a retail company's stock may not be just after Christmas. One of the biggest external factors to take into consideration today is the price of oil, if the oil price goes up how will it affect the company you are considering.

4. Do not be too anxious to get into the market, when you are considering purchasing a company's stock timing can be an important consideration, also bear in mind the timescale you will be holding the stock for, is a short-term speculative punt or a longer term investment over several years.

5. Having bought your stock you will have to keep a careful eye on it, check the company's reports for any major changes in the boardroom or the companies strategy consider how changing world affairs may affect your holding and if necessary act quickly to protect any gains you may have made or reduce any losses.

If you follow the above five vital tips about stock market research you will be well on your way to developing a profitable stock portfolio and long-term financial security.

1 comment:

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