How to Research Stocks
Researching stocks is very important in investing. You can't just buy any random stock. You need to know what you're investing in and why it is a good investment. You are investing in the future of a company when you buy its stock. As a shareholder, you plan for the company to grow and for the money you invested (by buying its stock) to grow too. This will not happen if you buy just any stock.
There are many ways to research stocks. I will be sharing a few that I use below.
One way to find out the daily trends in the stock market is to visit Marketwatch.com. Near the top of the home page, it shows the 3 stocks that went up the most and the 3 stocks that went down the most that day. (all by percentage) Try to spot any patterns in the top 3 performers and top 3 losers. For example, there were a few occurrences where the top 3 performers were cruise ship stocks.
My favorite researching method requires much more thinking. I scroll down Apple News to find articles about events that affect most of the world or just the US. I then think about how that event can affect the US stock market.
Another way to research stocks is to visit the Motley Fool channel on Apple News. (Motley Fool is a subscription-based financial website.) Most articles published by them give easy-to-understand stock recommendations. Motley Fool gives stock tips of all types from Small Cap stocks (companies valued from $300 million to $2 billion) to Large Cap stocks (companies valued at more than $10 billion) to articles on specific topics.
Lastly, I create my watchlist on the stocks app. My watchlist is not extensive, though. It's because about half the time I do my research on the spot. If there is a huge market crash, I search to see which stocks went down the most. I also look at Apple News to see what caused the market crash and the Stocks app (I use Apple) to find out which stocks are up.
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After you find a stock, you must determine if it is a good investment or not. First, check its one year graph. Has it been trending up in price? If it has, it is a good thing. Next, check the 52 week high. You might not want to buy the stock that day the price is at the 52 week high. You may have heard the saying, "Buy low, sell high." It's one of the most important rules in investing. You don't want to buy a stock when the price jumps to the 52 week high and have it dip back down after you already bought it. By then, you already lost some money. Finally, check its annual report. In a company's annual report, they talk about if they grew within a one year period and how they did overall in the past year. This will give you a good idea on how stable the company is and how they will do in the coming years.
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