Stock Picking Strategies For Discerning Investors

As long as the stock market exists, there must always be the bullish and the bearish trends in the market place. These are the two components that make up the stock market. What this implies is that for every single day that the stock market opens, there are people making money, and there are people who are equally loosing money at the same time depending on the direction of the market. As a discerning investor, you need to arm yourself with the strategies that are geared towards securing your investments and also ensuring that you profit from the market daily, regardless of the period on the floor, whether bull or bear. So in order to achieve this, your stock picking strategies and principles has an important role to play here.

The first principle a wise investor should adopt for success, is to go for value investing. This is one of the best known stock picking strategies. How do you go about this? Simply look for the stocks that are selling at a bargain price, but have strong fundamentals, which include the company’s earnings, dividends, cash flow, and book value. These are companies that are undervalued by the market, but are sure to soar immediately the market corrects itself, which is certain that it will do. It is important to note here that not all prices that are down that are cheap.

So a value investor will know how to do his due diligence before arriving at the conclusion that a particular stock is cheap or not. Price does not always determine whether a stock is cheap or not, the determinant factor is the fundamentals. E.g., if a company’s share price suddenly drops from $20 to $5, it does not mean that the price is cheap at that $5, rather, a value investor will first of all find out why the price nose-dived. Is it as a result of over-pricing which the market is now correcting? Or is it as a result of some fundamental problems? Or just because of profit taking and other market forces which does not affect the company’s fundamentals? These are the questions that a value investor must find answers to before investing his cash. The value investor knows that profits are made not just by trading of shares; rather, profits are made in stocks by investing in quality companies with strong fundamentals.

If you really want to make money in stocks, you have to sit down first, and ask yourself the type of investor you want to be. Ask yourself whether you are just trading in shares or whether you are investing for value. Don’t follow the herd. Do your due diligence before investing. The internet has made things so easy today that you will get any information you need at your finger-tips. When you do this and remove greed, you will definitely make it big investing in stocks. Know when to exit and do so immediately, as waiting a minute or a day longer can wipe out a big fraction from your investment profits which are not a good idea at all.

I will like to see other contributions and comments about this post.
Eze Ikechukwu is a pastor, motivator and inspirational speaker. He owns many successful websites among which is http://investmentpicks08.blogspot.com

— Eze Ikechukwu

Researching Stock Trades

tings. Every now and then the feds cut or raise interest rates. This can have a big impact on the movement of the market. Stocks may rally on the news of an interest rate cut and fall on news of an increase in the interest rate. This due to the fact that lower interest rates help businesses and aid growth, higher interest rates can hurt growth.

Another thing you may want to keep an eye out for is earnings announcements. If a company has good earnings there stock is likely to go up. If they have bad earnings there stock is likely to go down. Predicting earnings can be risky, it can be a good idea to stay away from a stock announcing its earnings.

You may also want to check on the company itself to make sure that it is a good company. Every time I place a trade I take a quick look at the company itself to see how they are doing. You do not want to buy a stock that is going to go bankrupt tomorrow.

Finally you always want to check out the technicals of a given stock before you buy it. Is it up trending? Forming any chart patterns or candlestick patterns? That can be very important in deciding which way to trade the stock, or if to trade the stock at all. Checking the trend of the industry group and overall market may be helpful as well.

There is a lot of homework to be done for every trade. Just remember not to overdo it. While it is important to put the odds in your favor, you need to pull the trigger if you want to make money. You can’t wait until everything is perfectly aligned before you act.

Source: http://ezinearticles.com/?expert=Shaun_Rosenberg

Online Trading – What You Shouldn’t Do

You should exactly what you are doing, and you must know what you shouldn’t do, because you will lose a lot of money in online trading if you don’t know that. Let’s talk about it. Here are some Don’ts you should avoid when doing online trading.

In last few decades, people have witnessed the highly booming economy of online trading in stocks. No more those black coat gentlemen who vowed their elite ness with their snob looks are seen on the street of the stock exchange. Internet trading has opened thousands of opportunities for the layman to invest. Also, shifting the trend from savings to investments has got a revolutionary change in the stock market.

It is to be noticed that every coin has two sides and same applies to trading online. Unlike other businesses it is risky and calculative. Hence, the mediocre in form of stock brokers and brokerage firms emerged so as to provide access to stock exchange to each investor. Common features of online trading are the speed and easy access. Also, the availability at competitive prices has also provided another opportunity to the traders.

The black side of online trading is the fear of fraudulent activities that can eat whole of the investments. Also, being online, the frauds are tough arrest. Hence, prevention is better in this case. Thereby, here are some tips that may help any trader to avoid catastrophic situations while trading online.

• Do not trade with unregistered stock brokers or market intermediaries : non-registration with the stock exchange is the first sign of fraud. Any sensible service provider always follows the market rules, hence get registered with NYSE, NASDAQ or corresponding stock exchange. You may also come across some sub-brokers that may not be registered and offers extravagant services to the traders. Such people must be avoided as they induce investors to invest money at low cost and end up taking all the investments with them.

• Do not leave your transaction slip with the intermediary : leaving the transaction slip with the intermediary is way too risky. Any fraudulent transaction may be added by the intermediary resulting in huge losses. Hence, avoid such mistakes.

• Do not get overwhelmed by false advertisements or hyped declaration of growth of companies: companies need their share prices to rise and most of the times there are hyped performance levels discussed in the reports. Hence, do not trust blindly and invest huge amounts in the shares. The 2% rule must be followed and make sure that you integrate your investments.

• Do not follow other’s investment strategies : be an individual and know the type of investor you are. Imitating other investor’s may prove hazardous. Plan your investments and develop individual investment strategies. However, utilising other’s experience and tips proves favourable but following them blindly is dangerous. Utilise online reports and statistical data available about the companies before investing in stocks to make your own investment strategy.

• Do not pay sac to any promise of guaranteed returns : stock trading is way too risky and fluctuating. People promising assured returns are certainly involved in frauds. Many traders invest with mediocre who make false promises of assured returns and end up losing handsome amounts. Never invest heavy amounts to one stock. Integration is the best way to avoid huge losses.

Now you’ve learned what you shouldn’t do, keep learning and you will make more money.