How to find which stocks to buy: 6 ways to find stocks to invest in. Methods to find equities to analyze for your investment portfolio.
Before you can go through a rigorous investment analysis, you need to find a stock to analyze first.
But how do investors find stocks to buy?
Are they trading based on secretive insider stock tips and information that is not yet public? Hopefully that’s not the case, because that would be illegal.
So, if it’s not stock tips, what is it then?
Well, there are at least 6 different ways for retail investors to find stocks to potentially invest in.
In this post, I aim to show you how to find which stocks to buy.
Let’s dig in.
How To Find Which Stocks To Buy
How To Find Which Stocks To Buy
1. Stock Screener
Most of the time, I dollar cost average into stocks I’ve already researched.
But when the markets are overvalued, it becomes difficult to find quality stocks to invest in.
This is where a stock screener comes into play.
Simply put, a stock screener allows you search for stocks using specific investment metrics.
For example, you can search for stocks trading at price to earnings ratios (P/E) below 15 that have a dividend yield above 5%.
By searching for stocks with specific investment criteria, you can filter out overvalued stocks and find opportunities the rest of the market might have missed.
Personally, using a stock screener is one of my favourite ways to find undervalued stocks with lower market capitalizations.
Otherwise, they might go unnoticed until a larger firm or website begins to cover them.
To use a stock screener, simply visit the research page within your brokerage platform.
If you can’t find it, check with your brokerage directly to have them point it out.
2. Mutual Funds & ETFs
Many people invest in mutual funds and ETFs because it’s the most passive way to invest.
If you don’t want to spend time researching stocks, index investing is likely the way to go.
But if you enjoy stock analysis and want a chance to beat the market, you can find stocks by looking through the holdings in mutual funds or ETFs.
Managed funds always disclose holdings in the prospectus. It’s fairly easy to locate the top 10 holdings of a fund on the company’s website.
In my opinion, looking at their top 10 holdings is a great way to find quality stocks. In short, investment analysts have already done the work for you. If they approved the stocks to be fit for the fund, there’s a good chance it’s good enough for your own portfolio too.
Furthermore, you can select the best performers from the funds, and you can find stocks in specific industries.
3. Read Blogs
Of course, I’m going to tell you to find stocks by reading blogs—I’m a blogger.
But in all seriousness, reading blogs is a fantastic way to find stocks to invest in.
There are bloggers like me who share what stocks they own in monthly dividend income updates.
Also, there are websites that exclusively write about stocks and investments to buy, such as The Motley Fool.
Keep in mind, you can’t just take their word for it and buy the stocks they recommend immediately.
You should always do your own due diligence and complete a thorough investment analysis.
This way, you can ensure that the stocks fit in line with your investment goals and meet your own investment criteria.
Related article: Dividend Growth Stocks: The Top 9 Dividend Growth Stocks To Invest In
4. Twitter/Social Media
Another option to find stocks to invest in is Twitter or alternative channels.
Similar to bloggers, there are plenty of Twitter accounts that share their investments publicly.
Twitter is the best option, in my humble opinion. But other options, such as Reddit and Facebook, may be good resources too.
Just make sure to do your own research, and don’t get caught up in the frenzy.
5. Observe Labels & Brands
An underrated way to find stocks to buy is just through real-life observation.
You can start by looking at the products and services that you already use.
If there is a particular brand you like, find out if it is a publicly traded company.
In addition, observe what brands family and friends use. Look for patterns.
If you notice your friends and family use a particular brand and they are fond of it, check to see if it is a publicly traded stock.
In the past, I’ve even used this method on trips in other countries.
If you ever go out to a restaurant with me, don’t be surprised if I’m checking the label of the condiments on the table.
Even the restaurant itself is probably a company I am considering investing in.
6. Stock Tips From People In Different Industries
We all have our circles of competence.
Because of your career, you are probably more familiar with certain industries.
But your personal skillset might limit you to understanding other industries well.
You might have a blind spot.
To offset these biases, it’s a good idea to talk to friends and family who work in different industries.
Perhaps they have valuable publicly available information to share with you.
As always, though, don’t just take their word for it. Do your own research.
How To Find Which Stocks To Buy – Final Thoughts
After you analyze enough stocks, it should become clear that there are only a limited number of exceptional businesses to invest in.
In turn, you will need new methods to find stocks to buy.
When the markets are overvalued and once your portfolio is diversified enough, these 6 methods to find stocks should come in handy.
In summary, here is how to find which stocks to buy:
- Use a stock screener
- Look through ETF and mutual fund holdings
- Read blogs
- Use Twitter and social media channels
- Observe labels and brands
- Utilize stock tips from people in different industries
Just remember to complete your own investment analysis after you find stocks to buy.
Now I’d like to hear from you. How do you find stocks to buy? Do you use any of these methods?
Related Articles On Investing
Investing Metrics For Research On Stocks: 10 Key Metrics
Dividend Growth Stocks: The Top 9 Dividend Growth Stocks To Invest In
Monthly Dividend REITs: 5 Reliable REITs That Pay Every Month
Best Growth Stocks: 4 Stocks That Could Make You Rich
Stocks Under 50 Dollars: 6 High-Caliber Stocks Trading At A Low Cost Per Share
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