Selecting Stocks from a Shopper Viewpoint

By Philip Usher


Making an investment in the stock market often comes down to one essential element, namely good choices. Regardless of how well we do our research, how often we purchase and offload, or how much we pay professionals for their pointers and advice, without choosing stocks that represent value we will not be successful. Though some are good at presaging the direction of the market and timing the swings and roundabouts, if they don't purchase the right stocks, they will still meet with difficulties when attempting to harvest profits.

Because of that, some of the finest paid folks on Wall Street known primarily for their talent at picking stocks. Financial consultants give talks and write books and newsletters about how to select stocks that will outperform the market, and most professionals echo the same sentiment and agree that one of the finest methods to judge a stock is from the viewpoint of a consumer. By employing instincts we have already refined as standard consumers, we are able to frequently ferret out information that even the most skilled and software-savvy market watchers miss. While they study analytical charts, earnings reports, and the exchange ticker tape, people just like yourself essentially deal with the companies they invest in, because their experience as a consumer speaks volumes about the value of the company and its services and products.

Here are the kinds of things to have a look for as indicators of a firm's worth:

1) How popular is their product or service? If everyone you know uses it, and is satisfied with such things as price, consumer service, and reliability, the company is maybe well situated among the competition.

2) Are the workers satisfied? One of the best methods to judge a company is by speaking to workers. Many firms put on a good faade, but underneath the fancy promoting is lots of discontent. But if workers like a company particularly if they love it enough to buy stock in it that's an excellent sign.

3) How well known are they? You may find a great start up company with all the accoutrements of success, but find that it is less well-known. Many little or regional firms are favored in their own back yards, but the rest of the planet may not yet know about them. Purchasing such unknowns can be the best way to invest in the following hot stock. If the basics look great, occasionally being less popular is a nice thing for stockholders getting in on the ground floor.

4) If they went into Chapter 11, where would you go for similar services and products? If you can't think about a convenient alternative, the company is probably in a targeted market that enjoys purchaser loyalty and repeat business.

Look around, and notice what you see and how each business makes you feel. Then trust your intuition. Make a list of companies that get your attention, and then call their stockholder relations office and ask for all the details. By beginning your list with firms you've already got a first hand experience of, you raise the chances significantly that you're going to make intelligent selections.




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