When hunting down stocks to recommend, professional investors use a variety of different strategies. They use everything from screening programs that are computerized to good old fashioned field work.
Generally speaking you are able to find plenty of information about public companies via their website. Most of them will have a section created just for investors. In this section you will be able to find financial data and reports such as 10Q’s and 10-Ks. You can also use www.SEC.gov as a resource.
When buying stocks, it is just as important to know what to avoid as it is to know what to look for. Below I will share with you 5 things you absolutely must avoid when buying stocks.
#1 Headlines and Hunches
Stock trading is not the time to be an impulse buyer. You have to learn how to be very patient. You can’t let the latest headlines dictate your trading strategy. When you are patient it gives you a rare advantage over other traders. You will also be less likely to lose money.
#2 Stock Touting
Bulletin boards and internet chat rooms are usually full of stock touting. They are nothing more than pump and dump scams. Be very careful when using such platforms as viable information. It could end up costing you big time in the long run.
#3 Overpriced Goods
High flying stocks aren’t always what they are cracked up to be. Generally speaking their run is coming to an end in the very near future. So please, stay away from the overpriced goods.
#4 Jumping On Bandwagons
Jumping on bandwagons is a sure way to lose a lot of money. This is because more often than not you will be too late. The smarter move is to look at the history of a company before you decide to invest. Look for superior earnings and a proven track record of making wise investments.