“Playing the stock market” is a popular term for buying and selling stocks, but trading on the stock exchange isn’t a game; there are risks involved. When you buy stock in a company, you are then one of the owners of the company along with all the other shareholders. Although stock trading has always had risks, especially penny stocks, and always will, you shouldn’t think of investing your money in a business without knowing the financial picture of that business: past performance, current earnings, and projected future earnings.
Of course, you may find deciphering all of that information quite daunting. That’s the reason many investors seek out expert advice in the form of a stock broker; someone who not only understands the stock market, but who understands what criteria to look for in a company that makes owning stock in it a decent risk. Keep in mind that even if a company has a solid track record for earnings, there could be many other factors that might impact those earnings; factors you may not be aware of.
Brokers analyze companies and look for patterns, not just within the company, but in relation to the company’s industry and in relation to global fluctuations that might affect that company’s earnings. Obviously, most casual investors don’t have the time or the expertise to look at growth patterns, earning ratios, historical performance, inflation factors, or the host of other factors that will indicate if buying stock in a particular company is prudent or extremely risky.
If you are thinking of buying stocks, begin by choosing a reliable and reputable stock broker. To lessen your risk, you need to get advice from a professional who can look at all of the fundamental information about a company and advise you on the monetary risk you would be taking if you want to purchase stock.
An experienced broker can advise you about your investments, help you build a strong portfolio, and propose new investments that are compatible with your financial balance sheet and historical preferences. It follows, then, that the first thing you should do is look for a professional stock broker with a solid track record of recommended investments. Check out financial magazines and websites to see which brokers are in the news and in the know. A good example of an informative stock market website is the Peter Briger Blog. He has been in the stock market investment business for a half century, and is a well-known stock market strategist and respected portfolio manager. His blog is a good place to start in order to get ideas about financial global trends and investment strategy.
Take notes when you sift through stock market investment magazines, websites, and blogs, and then decide which investment advisor or firm is best for you and your interests. With so much turmoil in the global financial markets today, you would be wise to choose someone with many years’ experience; someone who is well-respected in the industry, and someone who has a great reputation for stock research, analysis, and advisement.
Photo via David Ohmer