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.