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How to Find/Choose Stocks?

It can become quite disorienting and confusing. So many stocks and funds, so little guidance.

Confused-guy2

Whatever stock you end up choosing, the important part is to not be pressured into it. You need to know exactly why you’ve chosen the particular stock, no matter how you ended up looking at it in the first place. You also need to know why you would want to get rid of your position in this stock. What is its role in your portfolio?

Before you begin, you need to know what kind of investor you are and what kind of investment you are looking to add to your current portfolio. Just starting? Looking for geographical diversification? Sector diversification? Dividends? Value investments?

Getting started

All-Star Lists

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There are many dividend champions, achievers, kings, aristocrats…etc. Lists that keep track of stocks like these can be a great way to get started when you feel like you need a little guidance. Not all stocks on such lists are right for you though, more importantly, not all are winners.

Stock Screeners

Many online brokers offer stock screeners. These enable you to narrow down your search using certain sets of criteria. You can choose criteria that suit your needs. starting off at For example, Canadian, Dividend yielding, and Highest EPS Growth %. I’ve put pictures below showing how 19,056 Stocks quickly become 88 Stocks. Many other, more in-depth, criteria can be used according to your needs.

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Your own head

Voodoo and psychic powers optional. But how on earth can you find stocks out of thin air?? Well, the idea is simply to have inspiration. It can come spontaneously, while driving for example, or not. When I have capital on hand and ready to invest, I like to take a moment and reflect on what the future could be. What products or services will people be using then? Which products have lived through the test of time? Which have faded away? These reflections can generate ideas and feed further research into specific industries or sectors, using the above suggestions.

Look at your own portfolio

Sometimes, the answer is right in front of us. After all, your portfolio should consist of all your favourite investments, no? Adding to an existing position can also be a good option, particularly if they lower your cost average or if the position is now underrepresented (rebalancing).

What to avoid

  1. ”Someone told me to invest in this stock/sector”. Do you own research. No such thing as a free lunch (except dividends).
  2. Google searches such as ”What to invest in…” or ”top 10 best stocks of 2018”. No clarification needed. Screenshot 2017-08-15 17.13.37.png
  3. Sponsored websites, gurus, or anyone claiming to have a revolutionary method of analyzing/finding stocks. ”For only $9.99 per month, have access to an exclusive PDF report revealing the stocks with the most growth potential!”. Nope. You’re better than that.
  4. Watching too much television. Staying up to date with world events is a good thing, but listening to political propaganda isn’t very constructive or useful. Same goes for finances. News = facts = good to know. Someone screaming at the screen and telling you to short the heck out of $WXYZ… useless. No one has more interest in your personal finances than YOU. Again, no free lunch. There was a recent blog post from John and Jane Doe about this, I recommend you check it out here.

Let me know how you go about finding potential investments and stocks, I’m very interested to hear what you guys have to say!

(This list is by no means and exhaustive one and represents my personal suggestions. I’m not a financial advisor, stay smart!)

Cheers!

-DI

 

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Dividend Investor View All

Money Lover, Dividend Growth Investor, Youtuber, and Blogger!

2 thoughts on “How to Find/Choose Stocks? Leave a comment

  1. Your own research is important. If is your money after all. Most people that give you “tips” probably wouldn’t risk their own money on those picks. I like some of the screeners online brokers have. Fidelity is pretty good for research. And they have their own analysts give ratings of stocks if that is helpful at all to people.

    Liked by 1 person

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