If one decides to start investing in stocks, the question then becomes: well, what stocks should I buy? More importantly, how do I find stocks worth buying? There are thousands of stocks out there, so it can be hard to choose. One thing that I believe is that because one can buy funds that replicate the market itself, there is no reason to buy any stock that one believes isn’t going to beat the market. This sounds obvious, but I have noticed that when people start investing, they are very focused on not losing money and will often put their money in companies that they believe are safe and won’t lose them money. Thing is, if that stock doesn’t beat the market, then they shouldn’t have bought it since they could have just bought the market itself. With this in mind, the question then becomes: how do I find stocks that can beat the market?
There are multiple ways that I find stocks. I try to find stocks that are trading at a reasonable premium relative to their earnings, are growing year over year, and aren’t in a bad amount of debt relative to their assets. This is the criteria for stocks that I am willing to buy. I believe that stocks that do these things will beat the market. Now, how do I find these?
Unfortunately, I’ve never been able to find a full list of market beating stocks. I’ve had to find stocks on other lists and compare them to my investment criteria. It doesn’t happen often. My strategy has always been to just find tickers and look at their numbers to see if they fit. There are stock research companies out there like, for instance, Zacks. They put out research on tons of stocks, and I try to take those tickers and compare them to my investing criteria. Most, of course, don’t fit, so I don’t buy. Every now and then, however, I find one that does, and I buy it.
Another thing that I do is look in funds. I can see what stocks funds are buying, so I will take those stocks and look at their numbers to see if they fit my investing criteria. Again, it takes a long time to find a stock that fits what I’m looking for, but when I do, I buy it.
I think the important thing to do is to make a list of characteristics you want your investments to have. After that, study as many tickers as you can to try to find stocks matching those characteristics.
Another thing one can do is enter their email down below as I write about a bunch of tickers.
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Finance by CWT 