Most people think that the stock market is for a chosen few. Some even go as far as to believe it is all a magic trick.
But contrary to that opinion is that it isn’t magic or just for a chosen few. It’s all a game of preparedness. Sometimes even the most proficient traders miss some of the best opportunities available.
Of course, there isn’t that magic wand to help you figure out the winners. But there are some ways you can learn to identify winners.
Pick Stocks That Are Based on Your Personality
If you’re a young investor, you’ll likely be awed by stock from companies that resonate with you. And that’s usually the right move.
You can keep tabs on it, and since they’re likely from something new, it is expected to grow in a direction you understand. That means it will be easy for you to identify if the company is moving in the wrong direction and jump ship early.
They’re Exporting Their Products Overseas
Companies that play on the global field are likely to be the safest bet in the stock market today. Most Americans think that the international market doesn’t affect stock prices, but that couldn’t be further from the truth.
Now that you've already picked out a company that’s based on your personality, pick the one that sells abroad, as well. You have higher chances of gain here than with the local ones.
Large Company Stocks Sold On the Cheap
Don’t ever pass on a large company that’s selling their stock on the cheap. The thing about large companies is that they tend to recover at some point, even if it doesn’t look likely at the moment.
The moment their prices start to gain, so will your portfolio, and also, your risk here is quite minimal. The minute you pass on bargain shares from big companies is the moment you lose. What can be better than to know you have minimal risk in a trade?
Review the Company’s Annual Report Before You Buy
Does the company look like they’re making smart investments annually, or are they heading down the wrong road? If you can’t identify when the company is making the wrong moves, then steer clear. Always be a smart investor by investing in companies who know what they’re doing.
One way to know if the company is on the right path for you is to ensure their business model is simple. Simple is great in investing.
Buy to Keep
It looks dumb to most people, but it's one of the significant tricks winners in the stock market have used for years. While you buy and sell and so on, this doesn’t give you enough time to grow with the company.
Some companies start not doing well but end up gaining over time, and you may reap the benefits if you keep with them. If they look right and likely to grow, buy their stock, and keep with it until they realize their potential. It’s what the likes of Warren Buffet have used to stay ahead for years.
Conclusion
To identify winners in the stock market can look like an uphill task for anyone who’s starting. But, once you get into it with a watchful eye and careful analysis, you’ll see that it is achievable.
