When it comes to investing, Warren Buffett, the famous “Oracle of Omaha” suggests that you don’t invest in something that you don’t understand. Before deciding to put your hard-earned cash into an investment, it’s important to do research.
Luckily, there are plenty of tools that can help you research investments you are interested in. As you consider your options, make sure you do as thorough a job as possible. It’s impossible to remove all of the risk from your financial situation, but research can reduce the likelihood that you invest in a total loser.
Where to Find Information about Investments
You can look online to find information regarding just about anything. Resources like Morningstar, Zacks Investment Research and The Motley Fool can be good places to start your research. You can find information on a variety of different investments. You can also read investment blogs to help you learn techniques and find tips. However, as with all things you read on the Internet, any recommendations should be carefully considered, and you should study the reliability of the resource.
If you are looking for information about company balance sheets, you can look at proxy statements, 10ks and annual reports. All public traded companies have to file reports with the Securities and Exchange Commission, and these public filings can give you a good idea of what’s going on with a company. Free Edgar is a great resource when it comes finding information about SEC filings. It’s fast and easy. You can also contact the investor relations department at most companies to get that information.
Online brokerages are also great resources when it comes to investment research. Most online brokerages can provide you with information about past performance, news that might affect stock price, and other useful information. The tools provided by your online broker can be indispensable when it comes to research your options and deciding on which investments you want to pursue.
Stock and Fund Screeners
Another way to research potential investments is to use stock and fund screeners. These research tools can help you find new and interesting investments that fit your specifications. You can usually enter information about parameters of interest, including cap size, dividend yield, P/E ratio and more. You can enter as many fields as you want. Then, the screen will present you with the stocks and/or funds that meet your criteria. You can delve deeper into the companies or funds that you are happiest with.
Don’t Forget the Fundamentals
Even as you look for investments using performance numbers and other technical information, don’t forget the fundamentals. You don’t want to neglect the “big picture” when it comes to your stock investing. Be sure to look at news about management, and try to figure out if members of the management team are competent and making good decisions. Look at underlying factors that can affect the long-term performance of the stock or fund, and include that information in your calculations as you research.
Take a little time to research investments, and get to know what’s involved, and you will be more likely to invest in long-term winners.