It is next to impossible to keep track of a large number of stocks. Hence it is advised to keep track of few selected and well researched stocks and focus on these stocks.
How to Select the Best Stocks to Buy
I have already explained in my previous tutorials how to do study and research to select the best stocks to buy. Below are some more tips to help you select the best stocks:
 |
| Portfolio Management |
- If a company is coming up with a dynamic new product or services and the product or services has great demand then the stock can be very active. Focus of these stocks.
- Focus on top performing sectors and buy shares of top performing stocks. Don't buy stocks that look cheap. Remember, it is quality that matters and not the quantity.
- Keep track on well performing mutual funds and see where are they are investing.
- Keep an eye on outstanding stocks and stocks that make new highs and volume. Look for opportunities when these stocks break their high prices and then buy these stocks.
- Understand market trends and then select your stocks.
- Sudden or unusual price fluctuation is not any signal to buy. Don't buy blindly on market dips. Use your brain and do research before buying any stock.
Budget ($) | Number of Stocks to Buy |
| < 20,000 | 1 to 2 stocks |
| 20,000 to 50,000 | 2 to 3 stocks |
| 50,000 to 200,000 | 3 to 5 stocks |
| 200,000 to 500,000 | 5 to 7 stocks |
| > 500,000 | 7 to 10 stocks |
Resources & References:
- Price-To-Earnings Ratio (P/E Ratio)
- Fundamental Analysis of a Company
- Using Value, Growth, Income & GARP for Stock Analysis
- Share Market Panic - What to Do? Buy, Sell or Hold?
- How Many Stocks Do You Need to Be Diversified?
- How Many Shares Should a Beginner Buy in Stocks
- NASDAQ Stock Market Glossary
No comments:
Post a Comment