Perhaps you've heard the statistics that say very few first-time investors make any appreciable money in the stock market. So much so that many fail in the initial stages of investing and are quickly scared away. Why is that? Because stock picks are more art than science.
Many people falsely believe that there is a "secret formula" for regularly picking successful stocks. However, that's simply not the case. There are too many variables in world economies and individual companies. The most successful investors know that their success rides on knowing and continually developing their art.
Analyzing Stock Picks
There are several different methods used to analyze stock picks before investing. None of them is intrinsically right or wrong; it all depends on your personal preference. The common methods of stock analysis are:
Fundamental Analysis - A strategy based in fundamental analysis looks to discover the fundamentals of any company in order to determine the intrinsic value of a stock. Investors will look at things like cash flow, growth rate, and projected future profits. All of that information will be compiled and discounted to account for the value of money over time.
Qualitative Analysis - Stock pick solutions based on qualitative analysis include some of the factors of number-crunching fundamental analysis. However, what makes it different is the fact that it goes deeper. Qualitative analysis also considers a company's management team, the histories of both of that team and the company in general, and the teams vision for the future. This is where the art of stock pick comes into play.
Technical Analysis - This analytical method completely discounts the other two. It is an analytical method that relies only on data compiled from a company's past performance. In the technical analysis, there is no room for projected future growth or management team vision. Those who use this type of analysis are sometimes known as "chartists."
Using Stock Pick Tips
Like any other type of art form, the arena of picking stocks has its strong and weak players. Some just seem to get it right every time. Others falter more often than they succeed. The question for the individual investor is how to make use of stock pick tips offered daily by the experts.
Understand that the art of stock picks relies a lot on intuition. You can employ all three analytical models, compiling reams of data, yet still find the success or failure of a given stock is completely opposite to what the data told you. Yet with practice, your intuition should give you additional guidance the data cannot.
The stock pick tips offered by experts are not infallible. So do not take them as such while devaluing your own experience and intuition. A better strategy is to combine all of your analytical and intuitive resources to make wise stock picks. At the end of the day, you'll win some and lose some. But that's the life of a stock market artist.
Many people falsely believe that there is a "secret formula" for regularly picking successful stocks. However, that's simply not the case. There are too many variables in world economies and individual companies. The most successful investors know that their success rides on knowing and continually developing their art.
Analyzing Stock Picks
There are several different methods used to analyze stock picks before investing. None of them is intrinsically right or wrong; it all depends on your personal preference. The common methods of stock analysis are:
Fundamental Analysis - A strategy based in fundamental analysis looks to discover the fundamentals of any company in order to determine the intrinsic value of a stock. Investors will look at things like cash flow, growth rate, and projected future profits. All of that information will be compiled and discounted to account for the value of money over time.
Qualitative Analysis - Stock pick solutions based on qualitative analysis include some of the factors of number-crunching fundamental analysis. However, what makes it different is the fact that it goes deeper. Qualitative analysis also considers a company's management team, the histories of both of that team and the company in general, and the teams vision for the future. This is where the art of stock pick comes into play.
Technical Analysis - This analytical method completely discounts the other two. It is an analytical method that relies only on data compiled from a company's past performance. In the technical analysis, there is no room for projected future growth or management team vision. Those who use this type of analysis are sometimes known as "chartists."
Using Stock Pick Tips
Like any other type of art form, the arena of picking stocks has its strong and weak players. Some just seem to get it right every time. Others falter more often than they succeed. The question for the individual investor is how to make use of stock pick tips offered daily by the experts.
Understand that the art of stock picks relies a lot on intuition. You can employ all three analytical models, compiling reams of data, yet still find the success or failure of a given stock is completely opposite to what the data told you. Yet with practice, your intuition should give you additional guidance the data cannot.
The stock pick tips offered by experts are not infallible. So do not take them as such while devaluing your own experience and intuition. A better strategy is to combine all of your analytical and intuitive resources to make wise stock picks. At the end of the day, you'll win some and lose some. But that's the life of a stock market artist.
SHARE
