Saturday, September 13, 2014

The Most Objective Place To Pick The Stock For Further Analysis

Stock screeners
In Singapore alone, we have around 770 stocks to choose from. I guess one of the challenges for most newbie retail investor is WHERE TO START? In short, which stock(s) should you pick to start analyzing (I am assuming you are not basing on "hear-say" type)?

One of the common way that the gurus will ask you to do is to start from YOU! I.e. look at what products/places/equipment you use/like the most and start identifying the related stocks from there. There is nothing wrong about but there is a limit to what you use/like that has associated stocks. Then what's next? 

To me, one of the most objective way (or place) to start picking the stock (to analyse) is through Stock Screeners. There are many FREE stock screeners around (for example : Google Finance's Stock Screener or Financial Times' equity screener). Of course, first you need to identify which are the parameters that you want to screen. For example, PE Ratio < 15, Dividend Yield > 4%, Stock Price < $1.50, ROE > 12  etc...(most of the common indicators are available for filtering). So now you know why I said this is the most objective place as the parameters are using quantitative indicators. 

After you've gotten the list of stocks, then you can start the real work of analyzing the stock(s) more in depth via Fundamental Analysis or Technical Analysis perspective (depending on your investing strategy).  


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