Buying Shares – Chapter 12: Step 2 – Research the Stocks

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Updated: Mar 5, 2019, 13:14 GMT+00:00

This is chapter number 12 out of 19. Read the rest: Read Buying Shares – Everything that you Wanted to Know but were too Scared to Ask – Chapter 1:

Buying Shares – Chapter 12: Step 2 – Research the Stocks

This is chapter number 12 out of 19. Read the rest:

While a number of private investors do their personal stock market study, it is a lot easier to locate a trustworthy stock tip sheet or equity research house that provides all the pre written research for you- this can be bought as a subscription service or in some cases is provided for free by online brokers as part of their service.

Don’t purchase a share arbitrarily because you have heard of them before without doing your own research. The stock market is thankfully not arbitrary, share prices move because of fundamental news and company news and investor opinion.

Understanding what make a share price move is the key to earning money on the stock market.

This is something you can develop by learning to read the company accounts, learning to use both technical and fundamental data, and stay emotionally detached from your trades.

A professional stock market analyst has:

It is natural to lose money on stock investing, don’t let it affect your trading day.

Take the time to study the market before buying shares:

Do your homework before starting your day’s trading.

Read the newspapers; make out which shares and indexes are doing well.
Go through the Company’s yearly reports, the ones in which you want to invest.
Talk to other expert traders for advice and opinion- this does not necessarily mean you need to take it though.

Or hire a full-service broker whose job it is to carry out this research themselves- they will make suggestions about which stock you should buy at what time. Because they are on commission for the profit it is easy to put your trust into these brokers, however some cases have shown that they haven’t been completely fair in their process of determining which stocks to buy and have accepted money to recommend particular stocks. Make sure your full-service broker is fully regulated.

If you find full-service brokers too expensive, and you should know that they do not come cheap or if you just don’t believe the advice they are giving you then go straight to the horse’s mouth or the FSA as we know it. The FSA or Financial Services Authority has reports from all UK based companies on their P&L (profit and loss), as well as info like current management details, income statements and other financial data which is important to know.

Remember you can also get information directly from the company that you have shares with, you are entitled to the quarterly and yearly reports if you have minimum amount of shares in that company.

Subscribe to a paid research newsletter service- they send the bulletins straight into your inbox. Eg http://www.fxempire.com/.

Most stock investors use the internet as a platform to garner information. It’s amazing just how much information you can find on the internet including, of course, news and company press releases. Also you can find instant access to free charts and real-time quotes.

Read Buying Shares – Chapter 13: How to Read Quotes of Shares
Read Buying Shares – Chapter 14: Buying and selling shares- how’s it done?
Read Buying Shares – Chapter 15: Buying Shares – The Rules
Read Buying Shares – Chapter 16: Tips for Stock Market Investing
Read Buying Shares – Chapter 17: The Difference between Stocks and Shares
Read Buying Shares – Chapter 18: Q & A session
Read Buying Shares – Chapter 19: Glossary words to learn