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A Rookie’s Guide on How to Pick a Stock to Invest In

  • September 14, 2021

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Did you know that 56% of adults in the US own a stock? If you want to join this group of individuals, you need to make sure that you're researching and learning how to pick a stock that will work for you.

Once you've made the decision to start investing and picking stocks, you will realize that you have a plethora of options to choose from. There are so many companies that you can invest in and the variety of industries available might be intimidating to a newbie. 

Investing in a stock takes only a minute, but investing in a stock that is actually going to perform? That takes a little bit more time and effort.

Keep reading below to learn how to pick a stock that will help you build your financial wealth. 

Figure Out What You Want Your Portfolio to Be

Do you want a portfolio that will grow slowly but surely over time? Or are you an investor that wants to pick a good stock that has a higher degree of risk for potentially more reward?

Whatever your main goal is for your portfolio, you need to figure it out before you can choose your stock. Every stock has pros and cons that have to be considered within the bigger picture of your investments and other assets. 

Pay Attention to Trends

Before you invest in the stock market, you should learn about the trends that are currently dominating. You can look at news websites to see what types of information are already available and learn about what has changed within the past 6 months to stay current.

In addition to that, it might be helpful to check out some of the opinions of those that are professionals within the stock market space. They have experience and insight that a beginner may not be able to pick up on right away, so looking at their logic and view on the market can help you make more educated choices.

Research the Market and Economy

Investing takes minimal effort, but investing in a way that will help you with your financial success is impossible without knowing what is going on with the economy. Even if you don't know a lot about economics, you can do a little bit of self-learning to figure out what it's all about and how it impacts the stock market.

Some of the main things to look at include:

  • Interest rates
  • Unemployment
  • GDP
  • Inflation or deflation
  • Trade wars
  • Company earnings
  • Political influences
  • Natural disasters

Remember also that different countries will have different stock markets and different economical implications. Click this link to find out more about the market in South Korea as an example.

Knowing How to Pick a Stock With Research

Learning how to pick a stock isn't difficult, but it takes some practice and know-how to do it well. As we stated before, there are many stocks out there, so you need to research which one will work best for your overall goals before you proceed.

Did you find this information helpful? If so, be sure to check out some of the other content on our website today.