Stocking Picking: How to Choose Good Stocks to Invest In

Stock Screens

There are literally thousands of stocks available for purchase on the stock market. So how do you go about finding the right ones to buy? Often it is helpful to use a stock screen, a set of criteria that you can quickly compare stocks against to see if they meet your requirements. You should first sit down and come up with a list of your investing objectives; once you have that you should be able to come up with a suitable screen . Your selection criteria for the initial screening should be a few quantifiable measures that you think are the most important for your investing.
Here are a few criteria worth considering (and of course there are many others):

Stock Research

Once you've narrowed down the list of stocks that you are interested in, the next step is to research the stocks. There are a ton of great resources available out there for researching stocks, and fortunately most of them are free. Online research is becoming more and more popular because of its convenience and ease of use. See the JB Oxford stock screener on this web site for an effective way to rank sets by the criteria that you select.You should also take a look at the company's annual report and its financial statements for the following.


Perhaps the easiest way to access all of the statements available is through the SEC's EDGAR database (EDGAR stands for Electronic Data Gathering, Analysis and Retrieval). The database contains required disclosure documents for public companies and mutual funds, including annual 10K and quarterly 10Q reports, proxy statements for all public companies, and prospectuses and semiannual reports for mutual fund companies. You can access the EDGAR database directly, or there are other sites that re-organize the EDGAR data to make it easier to use.

Choosing a Stock

Once you've gathered the facts, you should then perform the analysis. Different investors use different methods for determining what stocks to buy. Most investors prefer fundamental analysis, although there are also a large number who focus on technical analysis . Whatever one you decide to use, here are a few final considerations to keep in mind:
By InvestorGuide Staff

Copyrighted 2020. Content published with author's permission.

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