When you want to find a good stock to invest in, you need to first have to understand exactly what you are looking for. Carefully read below to determine exactly which stocks you should add to your portfolio.
To find a good stock, you have to first define what "good" means. The definition will be different for each person. It really depends on what kind of person you are, how much risk you are willing to tolerate, and how long you plan on investing your money. All of these things will help you determine which stocks are perfect for your kind of portfolio.
You'll also need to assess the kind of market that the economy is in. Is it a bear market, or a bull market? Is the economy in a recession, or is it reaching a high point? These are all important questions that you need to understand first before being able to find a good stock for your portfolio.
Next, find some companies that you may be interested in - not because their stocks are good (we don't know this yet), but because they are reputable companies with a good history and a good business plan. Look in several sectors, including technology, for any companies that interest you. You can find some good information about companies on Google News and on websites like www.morningstar.com.
Once you have a list of companies you may be interested in investing in, you're going to have to do some research first. Many people think a good stock is just one with a high "Morning Star" rating, which is somewhat true people there are many people out there who devote a lot of money to determine their rating, however there's a lot more to it than that.
Find the stock ticker on Google or Yahoo (or other favorite stock ticker website or service), and look at the history of the stock's growth and activity. This is regardless if you plan on investing short term or long term. See if there are any trends that may be happening within the company, or in the industry.
Tips & Warnings
- If you're a beginner in the stock market, don't put all of your eggs into one basket. In other words, find more than one good stock and diversify your portfolio, usually in different market sectors. If one sector goes down, you'll have the other investments you've made to keep your overall portfolio looking good.
- As we all know, even though a stock may look good on paper, nothing will ever guarantee a profit. Always consult with a CPA or professional stock individual before putting in your money, even if you did find a good stock to invest in yourself.
- Many people try to "time the market", which should never be done because most people ending up being wrong and are out of their investment. The best thing is to do the research as outlined above, and invest in good stocks based on what you find.
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