Researching stocks involves incorporating multiple sources of information, deduction and strategies, all whilst markets are constantly transforming. Stock traders and investors need to know what information is useful to them as well as the most efficient and accurate way to go about stock research.
This article will explore key aspects of researching stocks:
- How to get started
- A step by step guide to stock research
- Stock research toolbox
- How to do research on stocks: Key takeaways
Just getting started in the stock market? Read our guide to stock trading basics[1]
How to get started with your stock research
Prudent investors do not often make investments without prior research or substantiation as to why the stock is attractive for purchase. Stock research in a general sense begins with an understanding of three key details about a company:
- Present financial health
- Current management
- Future vision and roadmap
Crucially, one thing many investors fail to do is align a company’s values with their own, which is important for finding the best investment that meets their specific goals. Therefore, being mindful of your investment strategy, and why you are looking to invest in stocks can help to guide your decision-making processes.
A Step by Step Guide to Researching Stocks
As well as understanding the current and future position of a company, effective stock research needs to consider the following factors to help investors reach a decision in the effort of meeting their goals and desired strategy:
- Time horizon for investment
- Risk levels
- Type of stock industry/sector[2]
- Understanding the company product/service
- Financial reporting
- Competitor and industry analysis
- Following industry experts
- Using research platforms and terminals
- Stock order types
- Broker fees
1. Investment time horizon
Time
