Getting involved in the stock market means you've got to start somewhere. This course will give you the tools to find stock picking ideas and kickstart your investing career.
There are two types of shoppers out there: impulsive and diligent.
Imagine a person buying a car.
An impulsive shopper will walk into a showroom and buy the first car that catches his or her eye. A diligent shopper will do his homework, shop around for deals and find reviews and comparisons before taking out his checkbook.
Which shopper do you think will end up with the better deal?
The Stock Market
The stock market isn’t any different. The most consistent investors will devote weeks or months shopping around and researching different companies before finally investing.
Easier said than done, right?
The most common problem facing new investors is, “how do I know which stocks to buy?”. We know we don’t want to be the impulsive shopper and buy the first stock that comes to mind. But still, where should we get started?
The truth is that stock ideas are all around us. You see, stocks are tangible: they represent real companies that we encounter everyday.
This course will show you how to spot those buying opportunities.
They say you should write about what you know. So, we’ll take that advice and share some back: invest in what you know. Part of successful stock-picking is understanding exactly what you’re investing in. If you know the industry, you’ll have the upper hand when deciding when to fold’em and when to hold’em.
In fact, the world’s most famous investor, Warren Buffet, calls this the “Circle of Confidence”. Buffet famously avoided the tech boom and burst in the 2000′s, claiming he just didn’t fully understand technology companies. But in some cases an “old dog can learn new tricks”. In 2011, Buffett invested $11 billion in tech giant IBM.
One way to do this is to consider what you’re passionate about. Have a background in human resources? You might be well poised to buy stock in software firms, corporate services, and companies that support HR. Are you a foodie? Why not consider investing in companies in the restaurant industry?
Point is, you can draw on your business know-how, your hobbies, your passions, and your background to inform the choices that you make. Practice buying a stock in a business that you're interested in.
Now that you’ve got a list of some of the kinds of stocks you may be interested in, it’s time to bring in some technology and further your reach. The Web has provided us with some stellar tools for learning about and searching for different stocks. One of these tools is the online stock screener.
Think of these as search engines made specifically for the investment market.
Using the ideas you generated in the previous step, you can now browse by factors such as industry (or sector), price, and even analysts’ estimates of a stock’s growth over time. Don’t be daunted by the number of options. You can work with just the variables that seem manageable at first, then make your search more complex as you get used to using the screeners.
- Step 1: Head over to the stock screener at DailyFinance.com
- Step 2: Select the Sector of your choice. For example: Technology
- Step 3: Scroll down and select “Dividends Per Share” located on the side bar
- Step 4: Change low-end of Dividend Per Share from 0.00 to 1.00
The result should look something like this:
- Step 5: Hit the “View Results” button. This will show all technology stocks with a dividend greater than 1.
- Step 6: Hit the button below, and buy one of those stocks. Easy as that!