How to Research Stocks

How to Research Stocks

Where to Look
These days, the problem isn’t so much where to find information, but which resources to choose from among the millions of print, broadcast, and online media available.

Research Factors
The following are factors to look for when researching a stock:

  • Lasting trends: don’t fall for the flavor of the month, 6 months, or even the year.
  • Growth-oriented industries: for example, based on aging demographic trends, it’s reasonable to believe healthcare and pharmaceutical industries will perform well in the future.
  • Go against the grain: take a look at which market sectors are out of favor and find good buys that you believe will rebound.
  • International politics: a presidential election or governmental coup can make or break a country’s economy, so if you’re considering any foreign investments, investigate the region’s internal stability.
  • Rising popularity: if a company is already overvalued and doesn’t have the balance sheet to justify its inflated price, pass on it even if your neighbor claims he’s making a killing.
  • Buying from the inside: when you see companies buying up their own stock, it’s often an indication of its confidence in management and product or services and that it’s poised for larger market gains.