As a beginner, knowing that a low P/E ratio is generally better than high, a portfolio should be diversified across multiple sectors, and that analysis should be always taken with a grain of salt — you think you are finally ready to take the plunge and pick stocks for your precious funds.  But wait! Before you make the final decision, how do you go about selecting the best equity investment? Especially when going through every balance sheet and income statement out there to determine optimal net debt and net margins is impossibly tedious? How can you be assured that you’re buying the right stocks? 

Determine your goals 

First, figure out the purpose of your portfolio. For instance, are you looking for income, capital preservation, or capital appreciation? Income-oriented investors will focus on low-growth firms in sectors such as utilities. While others who have a low-risk tolerance will invest in sectors such as blue-chip corporations.

Keep an open-mind

The most pivotal factor in investment is keeping up with current market news and trends. These happenings are what directly impacts the market shares; you can read blogs, magazines, and online financial news as a simple form of research on a daily basis.

Finding the one 

First, find the ETFs that track the performance of the industry and check out their holdings. Next, use a screener to filter stocks based on your specific goals and sector mentioned earlier. You can continue to search the internet for stock analysis articles and financial news release to gain a general understanding of recent trends.

Use Corporate Presentations 

The last resource you should utilize is the company’s investor presentations. Although these presentations are less comprehensive than financial statements, they will provide a general overview of how firms make their money. They will also usually include the future direction of the company.

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