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Investing in the Stock Market Research Guide
Stock Market Investing - the Right Way
If you are new to investing, you might have the
idea that a rational person can buy stock in
some promising companies, for the long term,
and be happy with their investment.
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This greed-fear cycle that can come from investing is for real, and has drained bank
accounts, delayed retirements, and caused many divorces.
How to Pick Winning Stocks
You'll learn the basics of reading and analyzing a company's financial statements. This is part of what is called "fundamental analysis".
- The Golden Rule of Investing
If there is a golden rule of investing, it should be the
discipline to cut your losses when a stock drops 7-10%.
- Avoid Psychological Traps to Have Successful
From time to time, even the most successful investors
will hit a losing streak. When this happens, people have
a tendency to fall into these psychological traps.
- Changes in Stock Values Can Be Big Numbers
If you only look at where the price of a stock was and where it is now, you may be misled about the return on
investment. This example should be an eye-opener.
- How to Invest Smart
These suggestions are presented with the assumption that you intend to remain a casual investor.
- Stock Advice - Important Selling Rules
Sell if your stock drops 8-10% from the price you paid.
I can't repeat this often enough. If the price begins
dropping on high volume, don't wait for an 8% haircut -
sell it now.
- Poor Stock Buying Decisions
Basic "what not to do" investment traps. Don't a victim of these poor investing decisions.
Stock market indicators, the simplest being bull and
bear markets, are numbers that investors use to support
various investing theories. When certain numbers are
rising or falling or high or low, these people believe
that there is a clear meaning attached.
Stock Market Cycles
Are there market cycles that an investor can take
advantage of? You bet!
When a bear stock market may not
be a bear market
The big losses of the biggest companies can swing the
market indexes to look like the whole market is in
trouble when actually the true story is quite different.
Stock Index Futures
A “future” is a contract that requires an investor to
purchase a commodity at a certain price on a given date
– in the future. These contracts can be bought and sold
up until that specified date.
that Affect Stock Valuation
Learn about the four main aspects that influence a stocks valuation.
What is a P/E ratio?
In the simplest terms, the price-to-earnings ratio is the dollars that you pay for each one-dollar of earnings.
Value style investors don’t worry about the market trend
or the direction of the economy, or interest rates. They
don’t study stock charts.
One way of categorizing stocks is by their market
capitalization, the total number of shares multiplied by
the price per share. When their market cap is less than
$500 million, the company is relatively small and maybe
What is a Financial
There are 3 statements that the SEC requires
corporations to file on a quarterly basis: balence sheet, income statement, and a statement of cash flow.
Analyzing Financial Statements
A company’s financial statements tell you what a company
has (its assets), what it owes (its liabilities), its
sales (revenue), and how much it made in the accounting
period being reported (its profit or net earnings).
Red Flags to Look For When Investing?
Watch out for sales growing slower than accounts
receivable or inventory. Look at the balance sheet to
see if there are falling reserves for bad debt, or an
increase in deferred revenue.
How to Read an Annual Report
A recent study has found that women are twice as likely
as men to study a company’s annual report before
investing in a company. Why don’t most men bother
looking at it before they jump into a stock? Maybe for
the same reason they hate to stop and ask for
There are currently about 4,100 stock market analysts
working for 250 brokerages and investment banks. These
experts do their homework and get the inside scoop on
the prospects of the companies that they follow.
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