How Do You Pick Your New Investments?

I stick to good old fashioned fundamentals and "listen" to what the market is saying. If shares are rising ahead of results this generally means they have leaked and will likely beat forecasts. If you monitor shares hitting new 12 month highs you will soon notice trends - often months in advance of results. Momentum is the key

 

For sure, fundamentals are the main reason. At the same time, technical analysis and price movement are also important. Sometimes the only way to find new investment idea is to scan the market looking for unusual activity like gap up or growth more than 10% in a day, or volume spike. This could mean that something is going on there, so it will be interesting to read more about it.
The main part of the research is fundamental analysis, including sphere, past perfromance, current situation, plans and expectations for the future. If everything is OK, it is possible to turn back to technical analysis looking for the entry point with the lowest possible risk. It is important to mention here that while most of the investors are looking for the confirmation of the idea by the price movement, I found more comfortable (and profitable) to look for lowest possible risk. Such approach creates opportunities to improve the risk-reward ratio.

 

I share the same method, works best for me I must say.

 

If you can learn to read the markets then you will go a long way. Share price movements do not lie - lets be honest, the majority of sharp share price movements are the result of inside information leaking into the market place.

 

Interesting fact. It requires patience and attentiveness. This is why i don't like stock, the whole movement is slow.