When I was just starting out, I had no idea what stock to buy. I tend to rely mainly on my broker’s recommendation and other free resources online. I even signed up for a paid resource just to make sure I was investing in the right company.
Though there’s no such thing as the “right” company, I believe there can be good and bad stocks in the market.
So I tried to learn the basics fundamental and technical analysis. I started reading company’s financial reports, attended free seminars provided by my broker, and purchased some investing and trading courses online.
In the process, I learned how to evaluate companies to easily filter out good stocks to buy. And since I took up an advance trading course, I also did a bit of trading on the side to learn more when to buy and sell those stocks.
Eventually, I was able to figure out on my own which companies to invest in and developed my own investing and trading strategies. I mainly use fundamental analysis to pick stocks and apply technical analysis to enter and exit the market.
It was a bit of a challenge at first but learning those techniques helped me a lot in making my own investment decisions. And if you’re stuck figuring out what stock to buy, I’ve come up with some ideas for you to start with.
Start with what you know
I grew up in the Philippines and I know for sure some big companies that are well-known to Filipinos. To name a few, there’s Ayala, DMCI, Globe, Jollibee, Meralco, San Miguel, SM, and PLDT.
Though they’re popular, I’m not suggesting that you jump right in and invest blindly. But the fact that they’re still here, proves that they’ve established their businesses well enough and will most likely to continue providing their services in the country for more years to come.
The only problem with this approach is that you won’t be able to tell exactly how the company is doing financially. You might be paying a premium just to get a slice of their company. That said, you might want to do a bit of research to make sure you’re investing in the right company.
Choose from the list of PSE Index stocks
The PSE Index consists of the top 30 performing companies in the Philippines. These so called “blue-chip stocks” were carefully selected to represent the general movement of the market.
So, if you’re considering one of these stocks, rest assured you’d be investing in big companies with good track records.
Follow your broker’s recommendation
If you’re stuck, just follow your broker’s recommendation for now but make sure to understand how they evaluate companies so you can learn from it.
COL provides stock recommendations through their “Investment Guide” to help investors choose which companies to invest in. They also provide research reports about the companies they suggest so you can understand why they’re being recommended.
To use this guide, simply buy stocks with a “Buy” rating and make sure to buy below the suggested price to maximize your earning potential.
COL also provides streamlined stock picks every month called “COLing the Shots” which consists of about 5 to 10 stocks in different industries.
This gives you an option to have a diversified portfolio in case a particular stock or sector does not perform well.
Check out other trusted resources
There’s a lot of free and paid resources online. You can sign up for a free account with PinoyInvestor and get limited access to stock analysis, reports, and recommendations from their broker partners.
Click here to sign up.
They also provide free educational resources in their academy if you want to learn more about long-term investing and short-term trading in the stock market.
Learn Fundamental and Technical Analysis
Fundamental analysis is a technique used to evaluate a company to measure its intrinsic value. This mainly involves researching, analyzing, and evaluating the fundamentals of a company.
To know more, here’s a free resource from PinoyInvestor – Introduction to Fundamental Analysis.
There are a lot of factors to consider but I tend to focus more on earnings. You know that a company is doing well if it makes money, right? And what if the company can make more and more money over time?
So, try to look for companies that have earnings growth potential. Because if a company can generate more revenue year after year, then surely its stock price will go up.
On the other hand, technical analysis involves the study of market’s price movement and understanding supply and demand in the market to find out what trend will continue forward. This technique mainly applies to traders.
To know more, here’s another free resource from PinoyInvestor – Introduction to Technical Analysis.
Basically, you’d be looking for trending stocks (regardless of its fundamentals) and attempt to profit from it by buying low and selling high.
You can also check out COL’s “Technical Guide” for recommendations.
Note: If you have a COL account, you can sign up for FREE seminars here to learn the basics of Fundamental and Technical Analysis.
If you don’t know what stock to buy, start with what you know. Then find out more about the company you’re planning to invest in. Know what they actually do and how they’re doing financially.
You can also choose from the list of PSE Index stocks to invest in big companies. If you’re stuck, just follow your broker’s recommendation or other resources you trust while you’re still learning.
And if you have time, learn the basics of fundamental and technical analysis. Start reading company’s financial reports and learn how to evaluate companies. Knowing these tools will help you a lot in filtering out good stocks to buy so you can start making your own investment decisions.
In this article, you’ve learned how to pick stocks. If you have some questions, feel free to drop me a comment below.
Thanks for reading!