Simple Stock Selection Tips

Use Stock Screeners

Generally, stock screeners are research tools that display a number of companies that meet pre-specified by you criteria. Stock screeners can be of great help when selecting stocks and if you still have not realized their benefits, it is time to make a careful consideration.

Stock screeners are extremely beneficial since they greatly reduce the time you will otherwise need to make extensive researches. Additionally, most of them are free of charge.

The easiest, but at the same time most dangerous thing you can do is to purchase stocks at random. This will greatly increase your risk exposure and deprive your portfolio of the desired diversification.

Stock screeners give you direction in establishing your investment portfolio. They eliminate the chasing of stocks that are considered "hot" at the moment. They also eliminate emotions from your investment decisions. Stock screeners list a number of companies that exactly meet the characteristics that you require for your investing purposes.

Avoid "Hot" Deals

From time to time you probably receive advice on the next hot deal, but all you end up with is a substantial loss, because the hot stock news has reached you too late.

This usually happens since the price of the stock might have changed significantly. Additionally, the source you have taken the information from may not be reliable enough since it may have some hidden motives for pushing you into purchasing this stock.

You should also have in mind that once a company has reached the newspaper headlines, you are not the only one who has found the "treasure". Others have also read the news and know about this investment opportunity. As a result the price will be artificially inflated and soon will burst into dust.

Follow these simple stock selection tips and you will manage to establish a better investment portfolio that corresponds to your financial goals.

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