Investing Advice

How to Pick Winning Stocks

Maybe you're a little curious about why I'm throwing cold water on what may be your shortcut to wealth. The reason I am encouraging you to stick with mutual funds is that I promised you the freeway to wealth, not the bumpy road.

Believe me, if you don't have the discipline to do it right, you can lose a lot of money. Seeing the value of your investments go down is not fun. You'd have a better time throwing a big party and setting fire to your money for entertainment. Not discouraged yet? Great. Keep reading!

I am going to show you how to pick winning stocks. You'll even learn the basics of reading and analyzing a company's financial statements (oh, oh, can you really do this? Of course you can!). This is part of what is called "fundamental analysis".

To pick winning stocks, you need the tools to separate the companies with superior sales and profit growth from the ones who are just making a lot of noise. Besides choosing the right companies to invest in, you must learn how to read the market's trend so that your timing is right.

And picking the next big winner based on the news is not as likely as picking the next big loser. The news media's time-frame is usually very short, sometimes just that particular day!

Okay, you've made it this far. Unless you're feeling totally overwhelmed, don't skip to the mutual fund chapter now.

If you're really serious about becoming a pro at investing in the market you might want to become a student of technical analysis - reading stock charts. Read How To Make Money In Stocks and 24 Essential Lessons for Investment Success by William J. O'Neil.

Then attend one of his remarkable Investor's Business Daily's workshops. At the very least, subscribe to the Investor's Business Daily. This incredible publication does most of the work for you, the serious or casual stock market investor. (I receive nothing from Mr. O'Neil or his excellent business paper for my endorsement. You can depend on me to only recommend the best).

Doing all this research takes a lot of time and is prone to error. Isn’t it easier to just get copies of Money, Smart Money, Business Week, Forbes, Fortune, etc. and buy the stocks that they recommend? After all, most of these stocks have been chosen by really smart professionals. No, no, no. See the section on stock market analysts at the end of this chapter, you may be surprised.
 

A person’s investment success or failure is partly determined by good or bad luck. When an investor has made money in a good bull market, it’s hard to know just how much was because of their investing skill. People will let you know about their successes, while quick to forget about their losers. You’re not likely to hear about the mistakes that they’ve made (all investors have).


Other Stock Market Basics Topics:

  1. Stock Market Investing – the Right Way
  2. More Stock Marketing Investing
  3. How to Pick Winning Stocks
  4. The Golden Rule of Investing
  5. Avoid Psychological Traps to Have Successful Investing
  6. Changes in Stock Values Can Be Big Numbers
  7. How to Invest Smart
  8. Stock Advice - Important Selling Rules
  9. Poor Stock Buying Decisions
  10. Market Indicators
  11. Stock Market Cycles
  12. When a bear stock market may not be a bear market
  13. Stock Index Futures
  14. Four Things that Affect Stock Valuation
  15. What is a P/E ratio?
  16. Value Investing
  17. Cheap Stocks
  18. What is a Financial Statement?
  19. Analyzing Financial Statements
  20. Stock Market Tip - Red Flags to Look For When Investing?
  21. The Annual Report – How to Read
  22. Stock Market Analysts – Stock Market Advice and Tips

Did you find the information you were looking for?
 
After reading the above article, what is still your biggest question?



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