- I've had money sitting in an Ameritrade account for months, and
I have yet to move on any stocks because I'm afraid I'll have immediate
buyer's remorse. Any tricks for picking out good shares so I can buy
with confidence? - Martin
Hey Martin - If you don't mind, let's replace the word "tricks"
with "strategies." There's not really a code to crack when it comes
to trading stocks. Instead, it's on you to develop a strategy that
keeps you honest and helps you find the best value. Here are a few
things to keep in mind.
within your wheelhouse. For whatever reason, people are constantly
buying shares in companies they've never heard of. I can't think
of a crazier thing to do with your money. That's like giving a
stranger a thousand bucks, asking for a yearly return, and not
signing a contract. If you're going to invest in a company and
stake your own money on that enterprise's success, don't you want
to know what the company does? Better yet, don't you want to believe
in the product that company sells? If there are items you constantly
buy and use, you're probably a fan of whoever makes those products.
I'd much rather you buy shares of a business you trust and understand
than some highly-touted tech company which you have no idea about.
The long and short of my stock-buying
advice is to be smart about it. Buy within industries you know, get
shares of companies you like and understand, and then stay the course.
As long as you don't try to outsmart yourself, you and the Dow should
get along just fine.
creative thinking with controlled buying. To find good value
you need to think about what markets, industries, and services
are poised for growth. Once you have a sector in mind, consider
the peripheral businesses and industries that influence the market
in question. For example, if you're interested in electric cars,
you might want to research businesses that manufacture innovative
batteries. By finding smaller organizations that bigger companies
depend on, you could discover an excellent business that's undervalued
by the general public. If you're still investing in companies
you trust, a little creative thinking can be a good way to diversify
your portfolio without taking on too much risk.
be afraid of a sale. The stock market is the one place where
people don't seem to like a bargain. If the price drops on plane
tickets, you rush to book a flight; when the asking price for
a stock goes down, people run for the hills. If you have confidence
in a particular company, buying after the stock price plunges
can be a smart move, but be sure you have good reason to believe
the company will recover from whatever caused the dip.
© Taylor Kovar
May 4, 2018
More "Go Far With Kovar"
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purposes only and is not an offer or solicitation for the sale or
purchase of any specific securities, investments, or investment strategies.
Investments involve risk and, unless otherwise stated, are not guaranteed.
Be sure to first consult with a qualified financial adviser and/or
tax professional before implementing any strategy discussed herein.
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