Why you must keep up with the news to find your next money-making stock
Keeping on top of the financial news can help you determine whether to invest and find new companies. There a variety of different newspapers, magazines, and websites that offer insight in the financial world. The numbers play a role just as equal to the financial news. The more informed you are, the better decisions you can make. Here are some top resources:
- The Wall Street Journal
- Investor’s Business Daily
- MarketWatch
- Bloomberg
- New York Stock Exchange
- Nasdaq
And of course, the new favorite, Tradepoint. So, what can you learn from these websites?
Here is the #1 thing- What the company is up to?
Before you invest, you need to know what is going on in the company. Be sure to answer these questions based on your media sources:
– Is the company making more net income than it did last year?
You want to invest in a company that is growing.
– Are the company’s sales greater than they were the year before?
You will not make money if the company is not making money.
– Is the company issuing the press releases on new products, services, inventions, or business deals?
All these achievements show a strong, vital company.
Knowing how a company is doing, no matter what is happening with the economy, is important.
#2 What is new with an industry?
As you consider investing in a stock, make sure you know what is going on in that company’s industry. If the industry itself is doing well, it is likely that your stock will do well, too. But again, look at how the company is doing, because the reverse is always possible.
It is true that some investors have picked successful stocks in failing industries, but those are far and between. Looking at the bigger picture, it is easier to see success with a stock if the entire industry is doing well.
#3 What is happening with the economy?
Whether the economy is doing well, or it is in a recession (like now), you want to look at the general progress. It is easier for the value of a stock to increase if the economy is stable or growing. The opposite can be true as well; a stock has a tougher time keeping its value during recessions. Here the key things to look at:
Gross domestic product (GDP)
The GDP is roughly the total value of output for a nation, measured in the dollar amount of goods and services. This is report quarterly, and a rising GDP will prove well for your stock.
The index of leading economic indicators (LEI)
The LEI is a snapshot of a set of economic statistics covering activity that precedes what is happening in the economy. Each statistic helps you better understand the economy. It is like seeing what is happening with the weather.
