Learning to invest-Researching Stocks the Smart Way

December 28, 2017

As a follow up to my rant a few weeks ago about women not investing, I figured I should put my blog with mouth is and at least have some simple instructions on how to get started.

I am not a financial planner by any stretch of the imagination, but I have common sense and a somewhat informed sense of the basics. So please don’t sue and do your own research before you hand over your money to anyone. I am not promising that you will learn how to pick stocks or learn how to invest by reading this series.

I am promising that it will give you the basic overview if you have never thought about going at it alone. Learning to invest isn’t difficult, it just requires patience and a bit of time to sit down and research.

But before you start picking stocks,  you should figure out your financial situation. I am hoping that if you are reading a personal finance blog, you have some inclination to either assess, or fix your financial situation. I am sure everyone knows that already. Today we are going to focus on picking stocks.

Although many people are aware that investing a portion of their savings is one of the best ways to achieve financial freedom, they don’t know how to get started. The first step to investing is learning how to perform due diligence when it comes to picking out companies and stocks to invest in.

After all, the point isn’t to lose money before you even get started. While this isn’t a fast, easy task, the process can be sped up by doing market research through your TD E-series account, which offers full access to independent research reports. As you can tell, I really believe that the E-Series is a great beginner tool.

That being said, it’s important to remember that nothing is guaranteed in investing – and there’s always the potential to lose a lot more than you started with. This is why it’s vital to learn how to research stock companies and make your own predictions.

What to Look for in a Potential Investment

In a nutshell, you will be using the following criteria to drill the list down into a smaller pool of stocks to choose from:

  1. Price-to-earnings ratio
  2. Overall earnings growth
  3. Dividends

Remember, there’s more to investing than just comparing the above three figures – you’re going to want to take a look at the overall picture once you’ve narrowed your choices down, including, but not limited to, the market cap, relative strength and the company’s return on equity, as well.

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