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Shares: Researching companies and screening for stocks

Created:
23 April 2008
Updated:
24 April 2008
Written by:
Dominic Picarda

Once you've set up a stock broking account, you're ready to start investing. But how do you choose which shares to buy? There are over three thousand companies whose shares are listed in London. Deciding which ones you want to buy will depend on your investment objectives, how long you're prepared to hold them, and what degree of risk you are comfortable with. The following articles should help you decide.

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Firstly, we consider how to research a stock - what you should be looking for, and where you should look for it. One of the first things to look for is a solid track record, which is why we emphasise a company's ten-year trading history.

Sometimes, companies' shares are moved not so much by company-specific factors like how much profit they're making, but by wider economic factors, like how fast inflation is rising, or whether interest rates are expected to fall or rise. Our guide to the bigger picture explains some of these factors.

You can also gain valuable insight into what a companies prospects might be by looking at what those in the know are doing. Nobody is more familiar with a company's prospects than its own directors, so following their buying and selling can be highly profitable. Our guide shows you how to do this.

If you find it hard to keep your emotions out of investing, then stock screening might be for you. This is a way of identifying investing opportunities using purely objective criteria. We show you some popular stock screening techniques.

MORE ON SHARES:

How to choose a stock broker and use direct market access: Using stock screens, how to read financial statements and how economic events affect stock markets.

Different types of shares: All about the Alternative Investment Market, trading international shares and unusual products such as Pibs and Culs.

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