• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • HOME
  • ABOUT

The Fortunate Investor

Investing, Business, Saving, Debt, Money, Retirement, Taxes and Family Finances

  • Business
  • Invest Your Money
  • Save Money
  • Get Out of Debt
  • Make Money
  • Family & Money
  • Taxes
  • Retirement
    • Retirement Calculator
You are here: Home / Investing / Stock Market Basics: Tips for Picking the Right Stocks for Your Portfolio

Stock Market Basics: Tips for Picking the Right Stocks for Your Portfolio

March 11, 2021 By The Fortunate Investor | This article may contain affiliate links. For more information visit our Disclosure

Tweet
Share
Pin
Share
Share

Stock Market Basics Tips for Picking the Right Stocks for Your PortfolioYou have heard that stock trading is a highly rewarding venture, and you want to start investing. One thing you will learn from experienced industry experts like Clifford Vance Cast is that you should always diversify your portfolio across multiple sectors. But how will you choose the right ones from tens of thousands of stocks? Continue reading this article to learn more.

Table of Contents

  • Do Your Homework
  • Invest in businesses that dominate the market in their industries
  • Invest in industries you understand
  • Don’t invest in a few sectors

Do Your Homework

When hand-picking stocks, it’s crucial that you do your homework first. Ideally, you should find a stock with a good value, especially if you want to hold onto it for some time. However, before you invest, conduct a thorough background check and review its fundamentals to determine its viability. Remember that you will be a shareholder of the company, which means you should do a proper analysis.

Invest in businesses that dominate the market in their industries

Have you noticed that some companies like Apple, Amazon, Facebook, and McDonald’s keep coming up again and again? This is because they lead in their respective industries, which will make your work easier.

Such companies will not only have a strong track record, but they will be more likely to come up with new and unique products and services. These new products and services will be much welcomed by consumers. Leading companies have the technical know-how, capital, and energy to turn their products and services into winners.

Invest in industries you understand

There are thousands of companies offering stocks, but you should highly consider those that sell products and services that you understand. Products from such companies will be more likely to get accepted by consumers. Therefore, if you understand the products a company produces, then you most likely have some knowledge of how the business works.

You may also consider companies that sell products or services that you have more than average information about. For instance, maybe you work in the industry, you were once employed, or you have a particular interest in that industry.

Don’t invest in a few sectors

Remember the cardinal stock trading rule: diversify your portfolio when investing. While it’s advisable to invest in industries that you know about, ensure that you don’t overload your portfolio with stocks from two or three industries. For instance, if you were employed in the IT industry, you may be tempted to only invest in IT-related stocks. However, remember that every industry will have its ups and downs. Therefore, while IT-related products and services may be selling today, it doesn’t mean they will remain there forever.

Let’s say you plan to invest in 10 different stocks, make sure that you diversify them across six or seven industries. Avoid the temptation to hold half of them in just one industry that you understand. While doing this will bring high returns when the industry is in an upswing, when the industry crumbles, you will lose your investment.

There is no exact strategy for picking the right stocks, but it gets better with experience and practice. By doing your homework, investing in leading companies, choosing industries that you understand, diversifying your investment, and picking the right stock trading sites, you can make huge profits from your investment.  

Primary Sidebar

Popular Articles

Tips for Dealing with Conflict in the Workplace: What You Need to Know

No one expects to be best friends with all of their coworkers, but at the same time, not getting … Read More about Tips for Dealing with Conflict in the Workplace: What You Need to Know

Final Checks To Carry Out Before A Safety Audit

Final Checks To Carry Out Before A Safety Audit

Keeping the people in your business safe and sound is one of the primary responsibilities you have … Read More about Final Checks To Carry Out Before A Safety Audit

Use Your Home to Your Benefit When You Want to Make Money

Use Your Home to Your Benefit When You Want to Make Money

If you're a homeowner, you're in a fortunate position. You might still be paying off a mortgage, … Read More about Use Your Home to Your Benefit When You Want to Make Money

How to ensure success when entering the property market

How to ensure success when entering the property market

Are you thinking about entering a new market, with the property market being high on your list? The … Read More about How to ensure success when entering the property market

Do You Know The Cost Of Your Retirement

Do You Know The Cost Of Your Retirement?

Are you already thinking about retirement? Nobody should wish their life away, but that doesn’t mean … Read More about Do You Know The Cost Of Your Retirement?

Footer

TOPICS

SAVE MONEY
INVEST MONEY
REDUCE DEBT
MAKE MONEY
FAMILY & MONEY
TAXES
START A BUSINESS
RETIREMENT

THE FORTUNATE INVESTOR

ABOUT US
ADVERTISE
CONTACT US

The Fortunate Investor focuses on personal finance topics to build wealth. Topics include saving money, investing, managing debt, family and money, taxes, making money, college planning, starting a business, coupons and retirement.

SOCIAL MEDIA

FACEBOOK
TWITTER
PINTEREST
YOUTUBE

Copyright © 2023 Fortunate Investor. All Rights Reserved. | Disclaimer & Disclosure | Privacy Policy | Terms of Service