There are alot of stocks to invest in ?
How do you decide which one to pick ?
The best way to start is to decide which sectors to invest in. Decide for youself which sector you think you like and is going to do well in the near future. Once you pick the sectors you like, look into sub-sectors. Now inside this sub-sector look for companies with good EPS, P/E, PEG and market capital.
Everyone should make a like it – dislike it list, and STICK to it.
I will go through few of my personal ones.
- I like Gold/Silver stocks (metal prices might swing, but the love for gold doesnt)
- I like Tech stocks (companies with unique products, brand, outsourced cost cutting operation)
- I like Semiconductor stocks (manufacturing chips for prefered consumer products)
- I like Health Care stocks (with strong sales)
- I like Real Estate stocks (but i am bearish about them this qtr)
- I like High Dividend stocks (the divendend can compensate against any downward movement)
- I like Emerging Market stocks (way too much growth and its rightly justified)
- I like stocks with rock solid EPS and strong strong PEG
- I dislike Copper stocks. (less demand, too much supply)
- I dislike Airline/Transportation stocks (less margin, high operating cost, too much competition)
- I dislike Auto industry (too many job cuts, competition from overseas)
- I dislike Tech stocks (bad management, just another product)
- I dislike Wireless/Communication service provider stocks (again too much competition)
- I dislike Biotech stocks (especially when their drug might be rejected by FDA)
- I dislike Oil or Energy stocks (global warming, geopolitical scene)
- I dislike stocks with negative EPS and below par PEG (too volatile to trust)
Once the sector selection is done, it makes life much easier to decide which stocks you want to focus on. My reasoning for liking and disliking sectors are solely my opinion, and i would encourage everyone to do their own homework.