How To Pick The Right Stocks: Beginners Tips To Investment

With around ten thousand stocks to select from to invest in share market, how do you get the right investment advice and know about the ones worth buying? Apart from the suggestions some experts gave, it’s almost impossible to comb through each balance sheet to identify companies that offer a favorable net debt position and improve their margins.

A few key takeaway to follow while you invest in stocks are-

  • Decide and stick to what you want your portfolio to achieve.
  • Select an industry that interests you, and know the trends and news that drive it from day to day.
  • Identify which company leads the industry in the share market investments and which is zero in the numbers.
  • Remember that stock selection as a strategy often causes underperformance, and passive indexing, specifically over longer periods.

How must you pick a stock?

Traders who smartly pick stocks have three big things in common-

  • They decide in advance. What are their portfolios to achieve and stay determined to stick with?
  • They keep themselves aware of the daily news, events, and trends that run in the stock trading economy and every company.
  • They use this knowledge and goals to make decisions while buying or selling stocks.

Determine your goals-

The first step to choosing investments is to determine the purpose of your portfolio and select the right stock based on stock results. Everyone’s goal for trading is to make money, but investors might focus on generating income supplements during retirement, capital appreciation, or preserving their wealth. 

You can even use a stock investing app to invest in the right shares online or participate in intraday trading.

Stay alert-

It’s important to acknowledge the market news and opinions on high volume stocks. Reading financial information and keeping yourself updated with industry blogs by writers who are of interest is a form of good research. A blog, post, or news article mail forms the foundation of an investment thesis.

Picking a stock-

It is important to be critical of your own stories and assumptions instead of blindly buying oversold stocks. After performing qualitative research, corporate press releases, and investor presentation reports, prove as a good place for a detailed analysis. Also, open a demat account before you start investing in the stock market.

Find your company-

The next stage in the stock-selecting process involves the identification of companies. There are three steps to follow while finding your company, they are –

  • To find exchange-traded funds (ETFs) – ETFs track the performance of the industry you are interested in and tricks out the stocks they invest in. It is as easy as searching for the industry in ETFs. The official page of ETFs discloses the fund’s top holdings.
  • Using a screener- You can use a screen for filtering stocks on the share market online based on specific criteria, such as the industry & sector. Screeners offer users additional features such as sorting the company based on dividend yield, market cap, and other useful investment metrics.
  • Read & analyze- Search the stock analysis, articles, blogosphere and financial news, and releases for commentary and news on companies in the investment space you have targeted. Remember to be critical of everything you read and then analyze both sides of the argument.

These key takeaways offer you an easy starting point. Also, the strategy has clear advantages and disadvantages that investors must consider.


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