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How to Pick a Stock: Introduction
By: Michael Press
There are thousands upon thousands of companies that are publicly traded. Publicly traded means that anyone can buy shares of stock in that company. Because there are thousands of publicly traded companies, there's a great opportunity to pick that one winning stock that could double or triple your money. But finding a good stock can prove to be a challenge. Because of this, many people buy stock in a company based on "hot tips", or because their relatives or friends bought stock in a particular company. Other people invest only in companies they know, such as General Motors or Dell because they lack the knowledge that's necessary to research new companies. Every stock investor has his or her own way of finding a stock to invest in. Your stock picks will depend on your investing goals. For me, my investment goal is to make my money grow as fast as possible. So I invest in relatively new companies with great business ideas or products. This is considered risky stock investing, because a lot of new companies fail. But if the company grows rapidly, so would my money. Some people play it safe and invest in blue chip stocks. Blue chip stocks are stocks of a well-established and business-proven company. Blue chip stocks are generally have less risk than other stocks. Some blue chip stocks are General Motors, IBM, Boeing, etc. Before picking a stock to buy, you first want to determine what your investment goals are. Are you investing for capital gains, or passive income? Do you want to play it safe, but limit your return? Or do you want to be as risky as possible so you can make as much money as possible? The stocks you purchase for your investment portfolio are based upon your investment goals. In this tutorial I'll teach you how to find a stock, analyze it, and then make a decision to buy it or not. Also, I hope you like math! There are a lot of calculations involved with ratios. But don't worry, most of them are really easy. |
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