What Company Should I Invest In?

Once you decide to start investing on your own you face a problem: What company should I invest in to have good returns and not lose money? Everybody faces this question. There are several tips on how to pick the stock that is the best for you.

1. What is your area of interest?

If you pick a company that you are going to invest in it means you will need to read about this company, its industry and all relevant news. If you are interested in IT you can try to search for companies in IT industry.

Maybe you work in Pharmaceuticals then picking a company in this industry would be best for you since you have some experience and knowledge about what's happening in there. If you work in Retail industry then pick something like Target or Walmart. Are you interested in cars? Then you might try Automotive industry. So just pick whatever interests you the most and where you feel more or less comfortable.

2. Do the research

  

Once you've picked the industry you need to do a research within it. The mission is to see what is happening in the industry, what companies are the leaders, what companies are very promising or maybe some of them are about to go bankrupt. Read the news, industry analysis or professional reviews for the companies. You might want to check Yahoo! Finance, Business Insider, Wall Street Journal or The New York Times. Try to stick to well established and respectable sources of information like i mentioned before and don't trust any "Best investment picks", or any "Hot Picks" because they may be provided by sales people who need to sell the stock or manipulate the sales. Try to act on your own and don't listen to other personal opinions. 

You should check the companies Financial Statements to see how they are doing compared to previous years. All companies that sell shares in Stock Market have all their Financial Statements available to public for free. You can find these statements in Yahoo! Finance, NASDAQ or NYSE.

3. Get some education

Once you start doing your research you would definitely see new terminology or phrases the meaning of which you don't know. You should get some extra knowledge to understand what they mean. The best option is of course to go back to school and get a degree in Finance but you don't have to. At least read about investing on some educational websites or blogs. Here are some of them: Investor.gov, CFA Institute, Yahoo! Finance, Investopedia, Learn Investing. 

All the above should help you to make up your mind about picking the company. But it's only the beginning. Once you invest your money you need to regularly check on the news and financial data to see how the company is doing, whether you should keep your money there or it has become unsafe and you'd better pull your money out.