Understanding the Basics: How to Research Stocks

What is Stock Research?

Researching a company is the most important thing to do before buying a stock. Stock research helps you look into the health of the company and its potential to grow. It's almost like doing your homework before a huge test. Why? Well, stock research helps you make good decisions, avoid risk, and find stocks with the most potential. 

What to Look for When Researching a Stock

The first thing to look for when researching a stock is the company's revenue and growth. A profitable and expanding company will have increasing revenue and growth. Even if a company has a high revenue, you still have to make sure they can take home this money by checking its profitability. For example, Amazon’s profitability was 300 billion dollars from September 2023 to September 2024! 

Analyzing Stock Performance and Company News

It’s very important to pay attention to stock price trends. A stock chart that shows steady growth over a long period of time could indicate a safe investment, while a stock whose price is always swinging up and down may suggest some market uncertainty. Another major factor when researching is to pay attention to company news. Company news can range from new products to revenue to leadership changes. Staying informed about news announcements is crucial for making smart investment decisions

Stay Safe When Researching Stocks

When researching, it's important to remember to get your information from trustworthy sources. Social media is filled with personal opinions, hype, and countless pieces of misinformation. The safest thing you can do is always triple check facts even if they’re from credible websites. Always avoid listening to social media rumors you see online. For example, a website titled “Stocks that will triple tomorrow” is probably not trustworthy. Investing smartly is about careful research, and staying informed will help you make safer and smarter choices.

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Tell us a stock YOU want to research in the comments!