| Do you want to learn how to make expert stock | | | | products or technological breakthroughs. Try to find |
| market picks? Keep reading because in this article I | | | | the connection between these events and the |
| am going to teach you how to make the right | | | | effects they have on the profits of the company |
| investment decisions and develop investment | | | | you're researching. |
| strategies. | | | | - Industry research: Look out for any regulatory |
| To make great stock market picks you must begin | | | | problems, international aspects and any potential |
| by gathering all the facts. You can do this by | | | | competitors. |
| following these steps. | | | | · Company analysis - evaluate the demand for the |
| 1. Find a few companies that you want to research - | | | | company's products or services. Assess |
| get familiar with the basics of stocks and select a | | | | management's competency to run the company |
| few companies that you feel are going to do well in | | | | properly. Look into analysts predictions for future |
| the future. | | | | earnings and sales. |
| 2. Narrow down your list of candidates - locate the | | | | - Analyst's evaluations: Most company's have analysts |
| online annual reports for your short list and study | | | | to provide options about the firm. Study what these |
| them. Then based on your research narrow down | | | | analysts are saying about the company. |
| your list to 4-6 companies. | | | | - Management analysis: Do background checks of |
| 3. Find out more about each company - now you | | | | corporate officers. |
| must research the background of each company you | | | | · Valuation analysis - Discover the company's |
| have selected. There are four steps to doing this. | | | | forecast of future earnings |
| · Economic analysis - take a look at the economic | | | | - Earnings estimates: Stay abreast of current earnings |
| environment of the nation, inflation, interest rates and | | | | estimates, are they going up or down? |
| the companies current and past profits | | | | - Historical prices: You can tell where someone is |
| - News: read the companies press releases and keep | | | | going by seeing where they have been, evaluating |
| current with breaking news | | | | past stock prices can provide new insights. |
| - Economics: take note of how changes in the | | | | 4. Decide is the company is a winner or loser - after |
| national, regional and local economies affect the | | | | you put all of the above facts together you will get |
| company | | | | a good idea of what makes the company's stock rise |
| - Market: what is happening in the market, is the | | | | or fall, also you will be able to decide if their stock is |
| companies stock being bought and sold, are stock | | | | worth buying. |
| prices going up, what are the big players doing. | | | | 5. Finely determine how risky the stock is - if you |
| · Industry analysis - analyze the companies ratios | | | | feel the stock is risky you will need to add a risk |
| and the ratios from the past three years. How is the | | | | premium to your required rate of return. This risk |
| company performing in its industry? What are | | | | premium compensates you for the additional risk of |
| competitors doing, is the industry changing due to | | | | your investment. |
| general economic trends. | | | | By doing the above research and properly evaluating |
| - Industry breaking news: read news articles and | | | | the facts you will be able to make expert stock |
| trade journals to spot patterns that indicate new | | | | market picks. |