Stock Market Investment Research: Making Informed, Smart Decisions

Stock market investment research is used by professional investors and investment managers are part of their analysis of a stocks potential. Research provides information about a company’s financial forecast, management team, business prospects and financial results. This information is important to know when determining whether to purchase a stock or sell it.

A well-informed investor understands the importance of stock research and uses this information in their daily investing decisions. All investors should understand the process for researching information on the companies that they choose to invest in and use the information to make well-informed investing decisions.

Step 1: Read a Business Periodical

Periodicals such as a local business journal, Investors Daily and the Wall Street Journal provide good general information about business and the business climate. These publications are available on a subscription basis and give you the basic information you need to research a company.

A periodical will give daily stock prices and fundamental and technical analysis information such as price to earnings ratio, trading volumes and other statistics. This information forms the basis of your research that can be used for further follow-up and analysis.

Step 2: Cross Reference Company Information

The information that is found in a business newspaper or magazine should be referenced with company specific information found online. Sites such as MSN and Yahoo! provide financial information for investors and links to more detailed research and analysis. This research is available for either free or at a cost and is the same research materials used by brokerage firms and professional investment managers.

Step 3: Request an Annual Report

Each company produces a report known as a 10-K or annual corporate report, as required by the Securities and Exchange Commission (SEC) under federal securities laws. These reports contain detailed information about a company and its structure, management and financials, as well as information concerning any legal or disciplinary actions that may have been taken. This document exists as part of a company’s full disclosure requirement for investors.

You can contact the company’s corporate shareholders services area to request a copy of a company’s current annual report. This information is also available online in the form of a downloadable portable document file. You can also go the SEC’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR) online and pull up information about a company’s current 10-K filing and any amendments that may have been required.

Companies also provide quarterly or 10-Q reports that are similar in format to the 10-K.

Conclusion

Knowing where to go to obtain research information about a company and the steps to take to retrieve information will help you in your investment decision making process. You should take the time to make yourself familiar with various business and investment related publications and research sources and allot some time during the day to stay current with business news.

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