The secret to choosing good stocks is that there really is no secret to it. The winning techniques are tried and true. They don't work all the time, but they work often enough that the methods employed by successful stock investors tend to be more alike than different.
Information is the key. Having the right information about a company and knowing how to interpret it are more important than any of the other factors you might hear credited for the success of the latest market genius.
Information is even more important than timing. When you find a company that looks promising, you don't have to buy the stock today or tomorrow or even this month. Good stocks tend to stay good, so you can take the time to investigate before you invest. You get much of the information you need to size up a company's prospects on the Web, and a lot of it is free.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The Kiplinger way to succeed in the stock market is to invest for both growth and "value." That means concentrating the bulk of your portfolio in stocks that have good fundamentals -- as measured by earnings, price-earnings ratios, book values and other key indicators that will be explained later -- and holding those stocks for the long term. For those in search of income, not growth, it means applying the same tests so you don't make any false and risky assumptions about the stocks you buy.
The Kiplinger way is not based on buying a stock one day and selling it the next. It does not depend on your ability to predict the direction of the economy or even the direction of the stock market. It does depend on your willingness to apply the right measures before you place your order.
You should aim for an annual return of 10% to 12% per year on your investments. That's an achievable range if you plan your approach thoughtfully and stick to your plan.
By knowing how to use the basic tools that stock analysts use to separate the good from the bad, you should be able to find the stocks most likely to meet your goals and strategy. Take a look at the yardsticks professional money managers use to measure security values. You can use them, too.
So how do the pros sort out the good stocks from the bad? By comparing the following characteristics...
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
Embracing Generative AI for Financial SuccessGenerative AI has the potential to reshape how we approach learning about and managing our personal finances.
-
Europe Faces Economic and Political Headwinds Next YearThe Letter Challenges for Europe: Potential tariffs, high energy prices and more competition from China will weigh on the bloc in 2025.
-
Don't Sleep on Japan's Economic TransformationThe Letter After almost three lost decades, Japan — one of the world's biggest economies — is finally showing signs of life.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
-
Kiplinger Special: How Businesses Should Budget for 2025Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
-
Intel Braces for an Even Tougher Road AheadThe Kiplinger Letter Amid a long, costly turnaround, Intel resets expectations again. Its new woes raise questions about U.S. industrial policy and global chip competition.
