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Welcome FREE Investing Newsletter |
When I first started watching the stock market, I experimented with various fundamental analysis methods I had read about. I set up various test portfolios and watched the results. My first important observation is that simple buy and hold does not work. I have seen some of the portfolios that were profitable for over a year turn negative. Portfolio holdings should be periodically re-evaluated. The 'Risk Management' and 'Trading Psychology' sections contain free useful tips for portfolio management. Click on the links below to learn more about each fundamental investing technique. Average Broker Recommendations - Yahoo! Investing and other investing sites allow investors to scan for stocks with strong buy ratings. Think you can make money by simply picking recommended strong buys? Click the link above to find out the truth about highly praised stocks and why they perform as they do. Learn how dividends can indicate fundamental strength or weakness in a security. Look for the right signs and dividend investing is the closest you will come to safe buy and hold investing. Investors want to own stocks that use money effectively to continuously improve profit margins. Learn how to use EPS, one of the most effective fundamental predictors of stock price movement. Price to earnings (P/E) Ratio - The P/E ratio is simply a security's current price divided by its earning per share and is perhaps the most widely known method of stock valuation. Learn how to use the P/E ratio for investing. Learn how news should and should not be used to select securities to trade. Be aware of the dangers of using news alone to make stock selections. Insiders (company officers and other investors that hold large amounts of stock in a company) are required to report their stock trading activity on IRS form 144. Learn how you can legally use this information to greatly enhance your investing results. |
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