How to Research Stocks
There are hundreds of stocks in the London Stock Exchange. Trying to figure out which stocks are best suited for your investment portfolio can be a full time job. You can always flip a coin or listen to the latest office rumor but unfortunately, that is not profitable in the end.
Before investing in any stocks in the UK, it is important to do the proper market research. You have the option of doing the research or hiring someone else to do it. In recent time, some stock investors are not even interested in the research and instead subscribe to stock trading signal companies.
One of the most common sources for stock research is the traditional full service broker. The full service broker employs financial analysts whose job is to figure out what stock investments are suitable for the client. This research does not come free and recent events have made investors wonder whether full service broker research services are necessary.
If you cannot afford the services of full service brokers or just do not trust them, then the first place to look for information on a company you like is the Financial Services Authority. Every company in the UK is required to file annual reports on their operations with the FSA. In these reports, you will find various fundamental data like income statements, current management, and other financial data that will help you in your financial analysis.
Another great source for research material is the company itself. If you already own any number of shares in a company, you are entitled to the quarterly and annual reports. You can also contact the company you are interested in and request these reports from their customer service or investment relations department.
Have you ever registered for a financial newsletter? Some financial newsletters are more detailed than major financial newspapers. There are always good tips in a good newsletter. Such newsletters can be free or paid. Ensure you make the right decision on the newsletters, as some are not worth the paper they are printed on.
Newspaper and TV shows are also good sources of information. Internet interviews of senior company managers, CEOís, and directors though tilted towards positive views of their companies can be useful sources of information.
In this day of internet technology, most stock traders get their research in their own trading charts and trading platforms. Fundamental and technical analysis information is sent electronically to the stock traderís computer and he has access to the latest data. Some of these charts come free while others are paid for but they offer a great research resource for the stock trader.
Wherever you get your information, it is important that you ensure that the data is correct and reliable. Nothing is more dangerous to a stock trader than receiving information that is unreliable and not on time. You need to get accurate and reliable data and on time. Good research data can make a difference in an investorís profits.