How to Determine When to Buy Stocks

Knowing when to buy stocks can be a challenging task. Following a few simple steps can make the process easier.

Difficulty: Easy

Instructions

1. Determine what your goals are: How much do you wnat to invest? What type of return do you hope to get? How long do you want your money invested in stocks?

2. Research the industry, the companies and the products you are interested in. Trade magazies, newspapers and industry and company websites are particularly useful. In addition, Internet-based news services can provide you with up-to-the-minute information on teh companies and industries of your choosing.

3. Talk with a broker if you have one. Tell them what you are interested in and ask them to do the research for you.

4. In determining when to buy, it is important to ask questions such as the following: Is the industry prospering or declining? If it is prospering, how much higher will it go? If it is declining, how much farther will it fall? Will it rebound? Is this company profitable? What are it's products? Will these products continue to be big sellers or are new products on the way? When will this happen?

Tips & Warnings

• If you are "dollar cost averaging," it doesn't matter when you buy, since you are adding to each stock every month. _WHAT DOES THIS MEAN IN CONTEXT OF THE STEPS ABOVE????
• A good rule of thumb is to only buy stock in companies whose businesses you understand. If you don't understand what a company does, then you may be investing for the wrong reasons.
• Timing is everything, and no matter how hard you try, you won't nail it perfectly everytime. Don't play the stock market if you aren't willing to lose money ocassionally.
• Stocks prices are volatile. They can rise and fall rapidly.

[shmatov]

on 4/2/2009 For beginners in investing, it would be safer to invest in a mutual fund. Normally, a diversified (less risk) mutual fund is a mix of different stocks, bonds, and cash. Funds are managed by professionals. On the other hand, funds may have less return on investment. Non-beginners in investing could try to analyze stocks by themselves. It takes time to become a good investor; also investing in individual stocks is riskier. Some advices available http://www.addaptron.com/articles/how-to-become-successful-investor.htm

[whatsthatuc]

on 2/8/2009 I liked your advice 5 Stars!.

[infoseeker]

on 12/22/2007 economical news ,fed action, price of oil a lot of factors my affect the time to buy or sell,technical indicators like %R/onbalance volume/fast stoshastics/chaikin volatility just a few indicators that will help in ur decision happy huntng.

[WizeTrade]

on 11/30/2007 I disagree. With today's technology you can use software to get all the information you need. Wize Trade is the first ever red-light green-light stock trading software to hit the market. Long gone are the days of reading 50 stock charts. Wize Trade tells exactly when to get in and get out of a trade. This precision can not be found in any other program.

[question]

on 1/2/2007 I have recently had a chance of using a Personal Finance Software package by Australian business Parcus Group - Personal Finance Associate.
The product is very good. For the AU$29 it costs, you get budgeting, financial planning templates as well as advanced features that typically cost loads more as separate software packages such as investment real estate calculations (mainly based on rental cash-flow analysis) as well as some value based shares valuations (based on Warren Buffet's stock valuation methodology)
Their website is www.parcusgroup.com
For anyone interested in their own wealth creation (via shares or else) this product is definitely worth looking at.