How to Pick Stocks

Picking the right stocks is as easy as 1-2-3 – correct? If you do the right things at the right time with the right intention, then yes. Let’s put the puzzle together, talking about how to pick stocks to invest in by using the best stock picking services like Mindful Trader, or traditional stock market research.

how to pick stocks

Reading Books Is Helpful

o you remember the time being in school? You have read hundreds of books, and you know what, the knowledge you gained from reading brought you to where are you now. Reading books educates like nothing else. If you want to know how to find the right stocks, or how to find the best company to invest in, then reading books helps. That’s because you learn the proper methods.

The world is full of stock recommendations, but you are responsible for comparing stocks, and you have to come up with the right strategy on how to pick penny stocks, FANG stocks, ETFs, or even commodities. I have compiled a list of the best stock trading books. You won’t need every book on the list, but it is an excellent start to buy one of the books and to work from there.

Compounding Makes the Difference

It makes the difference between people who fail and people who succeed. It’s worth nothing to have one home run with an amazing profit in one particular stock if all other investments fail.

The sum of all your investments reveals if you belong to the most successful investors or not. To find good stocks to invest in is an important step at first in your investment career. The second and even more important step is to keep your profits and to compound them over time.

Invest in the Stock Market

What are the best stocks to invest in right now? It is essential to compare stocks and the companies that you want to invest in before adding them to your portfolio. It needs some experience before you see success in the long run. That’s normal, and all other young investors start the way as you do.

If you are undecided about how to start investing in the stock market, then you should start with a paper trading account first. A paper trading account helps you to find the right strategy and type of investment. If you like, you can try to trade like Warren Buffett by taking a look at his portfolio.

To trade Warren Buffett stocks on paper is the same good idea as with all other stocks. This way, you learn how to pick stocks to buy without risk attached. Once you learned to pick stocks the right way, and once your strategy is ready for real money investments, then you can proceed with a real brokerage account, or with one of the best investment apps.

Find the Best Dividend Stocks

It is easy to find the best dividend stocks to buy now. In the first step, you have to evaluate the current dividends on each particular company paid to the shareowner. There are various stock screeners available that help you to compare relevant data points like:

  • EPS
  • Dividend in $
  • Dividend Date
  • Market Cap
  • P/E

for free. A paid stock screener might provide an even more beneficial result. This depends a bit on your personal needs and budget.

Are Virtual Reality Stocks Worth It?

Virtual reality stocks are that popular these days because this niche of companies provides hardware, software, and services for one of the fastest-growing business sectors.

Make Money like Wall Street Does

I bet you have seen at least one of the best Wall Street Movies of all time. Everyone knows the movie Wall Street with Charlie Sheen and Michael Douglas. But there are many more finance movies and documentaries than someone could think of.

When I did start writing the article about the best Wall Street Movies, I thought about a list of 10. But sometimes things go a different way. I recommend you to read my article the best stock market movies to find some real golden nuggets.

How Does Warren Buffett Pick Stocks?

Warren Buffett is a buy-and-hold investor. When he starts investing in a company, then he often becomes one of the main shareholders. Therefore opening a new position can take weeks or even months. Otherwise, his buy orders would have a major impact on the market.

The same goes for selling, and that’s why his investments are all long term oriented. He just cannot switch them in and out of his portfolio that easily. So if he thinks that a company offers a good return on investment in the long-term, then he starts buying shares. Warren’s investments are based on fundamental data and growth expectations.

What Stocks Does Warren Buffett Own?

It’s easy to replicate Warren Buffett’s portfolio by looking at the positions held in his Berkshire Hathaway portfolio. Currently, 26% of the portfolio is invested in Apple Inc., 12.6% in Bank of America Corporation, and 10.1% in The Coca-Cola Company.

You can easily export the data from CNBC and calculate the portfolio proportions for each position. These numbers are official because Berkshire Hathaway has to send the 13 F filing to the SEC.

What Is a Stock?

To get a share of ownership of a particular company, you buy their shares. All shares have a ticker symbol. Apple Inc., for example, has the ticker symbol AAPL. Some people also call it a stock symbol. To buy a share, the company has to be listed on a stock exchange.

NASDAQ and NYSE are the most popular ones in the United States. Once you bought a share, you bought a percentage of ownership of the chosen company. Now comes the fun part. Three terms describe it correctly if you own shares from a public traded company:

  • Stockholder
  • Stakeholder
  • Shareholder

More often then not, people are talking about buying and selling individual stocks. But they mean buying and selling shares of stock. If you enter the position in the order form of your brokerage account, then you enter the number of individual shares. You can buy $20,000 of stock of a company, but 500 shares of a company.

About the author: Alexander is the founder of and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody, and has been quoted on Benzinga, Business Insider and GOBankingRates.