How to research stocks like a pro?
I’m trying to invest in stocks for the first time but I don’t really know what I’m doing. I’ve been using the graph to kinda guess if its a good investment or not. I’d like to find out more information, how can I do this to make sure I don’t lose money?
- ?Lv 69 months agoFavorite Answer
It sounds like you may be using technical analysis rather than fundamental analysis. Technical analysis is fine if you want to move with the waves of the market. That is buy and sell and daily or weekly. Fundamental analysis is better for long term plays. Buy and holds. There is no sure way that you can guarantee that you wont lose any money, but if you hold the stock for years and youve evaluated them before buying them and everything looks good about them, you should end up on top. Go to investopedia.com and nasdaq.com to learn how to evaluate what makes a company worth buying. If you stick with stocks and not give up, you will pick up tricks and strategies that will help you along the way. Good luck to you.
- kswck2Lv 79 months ago
Guessing means losing money. And since you have said you don't know what you are doing, go to Investopedia.com and learn.
- Anonymous9 months ago
There is no way to teach enough as an answer to a single question. I've written long answers barely touching the subject, and no one book can get you very far.
The best I can offer is a few basics.
1) All investing including bank deposits, are about risk and expected returns for that risk level. If you are not willing to lose money, you don't belong in the stock market.
2) Money has a time value caused by inflation- prices tend to rise over time. If earning 2% a year against a 4% inflation, in real spending value you are losing money over time.
3) The best investments have a good risk versus returns expectation. Lower risks and higher gains is the goal. Bad choices have higher risk and lower actual returns. Every investment can be estimated with your own expected risk and gain potentials.
4) Diversifying, as more stocks or more investment types reduces both risk and expected returns.
5) There are a huge number of choices in many forms. You start by learning about some choices. Common stocks, preferred stocks, bonds, mutual funds as open ended, closed end, ETF all of which have many types. Commodities, real estate related, cryto and national currencies, art and collectibles, and more.
6) The monetary value of anything is what is can be sold for, with a seller and buying having an agreed upon price that changes over time.
That's the base level.
If referring to individual stocks, they represent ownership in companies.
There is trading stocks, and trading options to buy or sell.
In trading stocks, the key is what and when to buy and when to sell.
To determine the "buy" you need a basic strategy.
You have to start with a top level of strategy.
You can trade based on price curves looking at price change over time and patterns.
That focuses on trading prices. The basic concept is something going up should continue to rise. There are historical patterns to learn about.
The other strategy is what I use, which considers the company and the shares being an ownership of that company. The goal in this is determining which stocks appear to trade lower in price than the value of the company they represent. These will usually be lesser known companies. To do this, you need a good understanding of math.
You can buy and sell on recommendations, analysts that do the evaluating for you.
One example of a stock I bought some of on March 30-
KOHLS CORPORATION COM --- Symbol KSS
$16.90 -0.64 (-3.65%)
Today, S&P 500 average of 500 stocks 2,870.12 -60.20(-2.05%), Dow 30 large industry companies 23,764.78 -457.21(-1.89%), Nasdaq mostly technology companies 9,002.55 -189.79(-2.06%), Russell 2000 as 2000 smaller companies 1,275.54 -45.70(-3.46%)
Kohl's department stores started the year at about $49/share and is down about 65%. In this pandemic, stores are closed now. They own a lot of their 1500 stores, own inventory, have cash. They stopped paying a dividend. The price per share is now half of the value of their assets as evaluated at the beginning of the year. They earned $4.37 per share last year which against the price is very high earnings. I am gambling that over the next year that the restrictions will be lifted, that the economy will recover somewhat and maybe see Kohl's stock at double what it is today. If the stores don't get back towards normal, I can lose money.
There are many financial numbers you can look at. Kohl's a moderate risk and I believe the expected gain is larger than the risk in holding the shares.
So, that is a partial statement about one stock.
You now start by deciding your acceptance of losing money.
You decide what you are looking to invest in, as domestic or foreign, large or small companies, and by company or by price curves.
This is as much as I can offer in one answer, and you see, I barely touched the subject.
- L. E. GantLv 79 months ago
Stocks and shares are basic commodities that change in value all the time. So, you look at the TREND of the graphs. You will find that, generally, a stock trades in a band. But there's a lot more to analysis than just trends. And you can never be sure of what will happen when you sell a stock -- it might be higher or lower than you expect.
No one can be right all the time. So, the "secret" is to look for many small wins, rather than one big win.
If you want more certainty, then use the index funds or mutual groups or bonds. They can go up and down, but the range is a lot less than for normal shares.
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- Anonymous9 months ago
You need to read a half dozen books. In the meantime, buy an index fund monthly. You have no business buying individual stocks until such time as you have $50k or so.
Vanguard S&P 500 ETF (VOO)
Losses are part of investing. No way around them.