Finding Great Stocks to Invest In

This is difficult, and that is the way it should be! If it were easy then everybody could get rich on the stock market without any real effort. Here are a few tips to help you find the best stocks to invest in.

Invest in new companies

They often enter the market at the best price, with each share often costing less than a cent in some cases. This is especially true for companies that are turning over less than ten million in profit per year. They are more of a long-term investment, but in just ten years, you can make a small fortune if luck is on your side.

Invest when a company is launching a new product

This is a well-known piece of advice and it is quite controversial. Some people have lost a lot of money from investing when a company is launching a new product. Virgin is a massive company and yet it lost millions with Virgin cola. Crystal Pepsi is another example, as is the Harley Davidson bubble bath, so you should be cautious when buying stocks based on new product launches. Be wary of buying stocks at an over inflated price.

Invest after the first initial drop in share price

Some companies enter the stock market with a price that grows a little and then drops suddenly. After this period, it will normalize and a more organic growth rate is established. Buying after the first big drop, and during the normalization process, is often the best time to buy stocks in a new company.

Use an investment advisory company

Some investment advisory companies will give you investing advice based upon your situation, strategy and budget. They can give you very good advice because they are more in touch with the market and its potential.

Keep up to date with the most current news

Do what you can to stay in touch with the most current stock market news. A stock investing newsletter is not something you should base your investing strategy on. But, you should use it to monitor the market and distinguish patterns that other people are not seeing. You can take note of things such as the halo effect, and how one company seems to fall during the same month that another rises.

Monitor the up and down swing

There are some stocks that simply go up and down with quite a predictable frequency. You can purchase when they are on the downswing and sell when they are at their peak. You will not make a fortune with this strategy, but it is a nice way of making easy money, and it makes investing a little more dynamic and exciting.

Only consider buying signals

Buying signals often turn out to be correct, but they are not guarantees, nor should you base your investment strategy on them. They are not predictors of success, nor do they have anything to do with skill. Some buying signals are created with the same logic that says water will travel downhill. Others are smothered with mathematical equations that only exist to reassure investors, as nobody can predict the future in any shape or manner, (Nassim Taleb books may help you understand this idea a little better).

Only consider standard investing advice

When you read the advice in national newspaper columns, you must understand that the advice they are giving is not special or secret. The odd thing is that their advice is not correct; it is simply a self-fulfilling prophecy. A newspaper tips a certain company, and so many people rush out and buy stock in the company, so the price rises. If the newspaper had not tipped the company, then its stock would not have risen in the manner that it did. Take this advice as you will, as it is up to you if you want to risk your money on this principle. But the fact is that stocks do tend to rise when they are tipped by national newspapers.

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