Don’t know anything about stocks, is that what you said? Well, you may be a beginner investing in the stock market, but you probably know a lot more about stocks and the companies behind them than you think. Do you own a computer? You probably know something about the company that makes it based on your experience. Drive a car? Buy your pizzas from a particular chain? Do you use soap? If not, we don’t want to know, but the point of this is clear; the things that you use as a consumer give you a list of potential companies for investments. A significant part of picking a winning stock is knowing the company and its products.
Stock Investing System
Picking a winning stock is not rocket science, brain surgery or voodoo; picking winning stocks is the result of having a solid stock investing system, sticking to it and using research to identify good investment opportunities. Picking winning stocks simply means that if consumers use and like something, its value will increase and the stock price will rise. The more well-received the product is, the more value it has in the stock market. And, having a clear idea of what company does to make money is the first solid step in investment risk management.
On the Alert for Opportunity
Once you realize that picking a winning stock isn’t so intimidating, you can start looking at companies differently. What do I use, what do my kids like, what about my friends? Not everything is a good investment just because everybody uses it, but let us take a look at a couple of examples of investment options based on this theory.
Ever heard of Microsoft? This “little” company came out of nowhere to revolutionize the personal computer. Now 95% of PC’s have Microsoft software and the company’s stock is considered a large cap stock and a solid investment. What about Dell Computer? This company was started in a college dorm room and became the largest manufacturer of personal computers. When Michael Dell decided to buy the company back the price popped up!
Companies such as these didn’t reinvent the wheel; they just got very good at marketing it successfully. There are people that think Windows isn’t the best operating software on the market; there are others that don’t like Dell computers. The key with these companies is their end-user focus and their ability to build an overall brand image that is superior to that of their competitors. These winning stocks became stock sector leaders by correctly focusing their efforts on reaching the customers. Ignoring this approach to picking winning stocks typically gets you into bad stock investments.
What’s the Secret for the Investor in Picking Winning Stocks?
The good news is, there is no secret to finding and selecting winning stocks; the bad news is that you need to invest a little effort. Whether you locate a prospect through observation, watching the news, or using a stock screener, you’ve only taken the first step. After this you need to do some research: fundamental analysis of the company, technical analysis of its earnings, and candlestick chart analysis of its stocks. By doing this you should be able to eliminate the companies that appear desirable but don’t have the actual strength to be included in your portfolio.
Many times you will find that you do have a good eye for investments; you will be able to look at a company and have an idea if you will want to include them in your stock portfolio. It is important to remember there is no substitute for doing your homework. Technical and fundamental analyses are the ultimate keys to locating winning stocks. Companies that have winning stocks usually have excellent customer focus. So what products did you use today that you can convert into winning stocks?