Introduction
Stock analysis is the most important skill a stock investor can master in to help them make precise decisions on when to buy and when to sell. Smart investors buy when they get a clearer picture of the stock based on multiple factors but how do you go about the process of stock analysis? The smart investors have no problem going about stock investment data and making investment choices. Many of them normally employ teams of analysts who use variable tools to help them analyze data and trends and make predictions but these resources are not readily available to the novice investors. To succeed in this game, you must learn a few tips yourself and learn to pick the right signals at the right time and make the right investment decisions, thereby making more money and minimizing risks.
Step 1
Tip 1 Learning how the company is doing: This is the most fundamental stock analysis method used by many analysts and investors worldwide. It involves investigating the financial statements and backgrounds of companies that are releasing stocks including the company policies, income statements and balance sheets and any other fundamental information about the company. If the company has good financial health then the stocks are safe. This info is normally readily available on company website or online business journals. You can also email the company to request investment related data.
Step 2
Tip 2 Learning how the industry is performing: This is another key in stock analysis method. If the industry is doing well or showing strong signs of future growth, then this is an area where you can comfortably invest. For example if you have invested in airlines stocks and air travel is showing strong growth prospects in your country, then you can rest assured that your stocks will do well.
Step 3
Tip 3 Calculating the company’s market capitalization: As an investor you must learn to calculate the market capitalization of the various individual stocks in order to determine the size of the company you are investing in. This stock analysis method is also quite reliable since larger companies are generally considered safer investments.
Tips
Tip 4: Study Charts and Indicators: You can consult a technical analyst to carry out stock analysis on the various charts and indicators of individual stocks that you are interested in but if you cannot afford it, why not learn it on your own. Charts and indicators provide a minute by minute trading volume and trends and can give you price signals and clues on when to buy and sell.
Tip 5 Analyze market data in real time : This is another reliable stock analysis technique that requires technical skills in monitoring and analyzing the stock market prices in real time. This information is generally provided by financial service providers through TV channels and online portals. You can use this information to develop a market timing strategy that enables you to make money over short periods of time even when the market is on a downward trend. Further, to learn from the experts is also a good method for stock analysis. You can tune in to your favourite business channel and listen to the various analysts’ predictions on the stocks trends. While you cannot trust every piece of advice offered by analysts, many of these players normally carry out thorough compilation of hard to find information that you can use to your advantage in your own stock analysis. Many key analysts also maintain blogs and Twitter profiles that can be valuable sources for investment information.
Source
www.stockinvestingideas.com/
