How to hit on that money maker stock

It’s never been possible to identify in advance a guaranteed profitable stock. If it was, then everybody would queue up to invest in them – and everyone would be rich! However, for those who invested in, say, Google when it was a small company, the returns have been amazing – and there’s bound to be another successful firm waiting in the wings. How can you increase your chances of identifying that firm? This article will share some advice.

Do internet research

The first place to start, of course, is online. There are plenty of websites that provide stock advice, and you’ll often be able to customise the advice you receive to the fields in which you’re interested. The advantage of finding this information online means that you can see it in real time: stock tips from The Bull update on a regular basis, so you’ll always be able to find something that’s relevant to your situation in the here and now. That’s a big change from those who were hunting for the most profitable stocks 50 or even 20 years ago, when telephone trading meant that time lags and inabilities to access information hindered the process.

 Read stock tips 

There’s a whole host of professional stock advisors out there, and you can take advantage of their years of expertise to hopefully hit on a winner. Some stock brokers can also provide you with advice, though if you approach what’s known in some places as a “discount broker”, then you’re likely to find that you’ll only receive purchasing services rather than advice. Another source of stock tips is in the finance sections of broadsheet newspapers, so it’s worth looking there. Usually, these columns will advise you to either buy, sell or hold (if you already own it) a stock. Remember, however, that the individuals who give out these tips might be experts, but they’re not certain either and they can’t guarantee any outcome. Taking their advice with a pinch of salt is wise.

 Be careful of the law

For most retail investors, sticking within the law will never be a problem. However, for some who work in the finance sector (or, indeed, in any sector with companies who float their stock), it’s possible that you’ll be exposed to information that gives you a knowledge advantage when it comes to buying the stock. You may be told, for example, that a secret product launch is coming up – and you might feel tempted to then go and buy some stock before everyone else finds out, on the assumption that the value will rise when it becomes public knowledge. This is called insider trading, and it’s illegal in many jurisdictions around the world.

There are, then, plenty of steps that you can take to help you identify that highly profitable stock that could set you up for life. Carrying out thorough research is one way to do it, while approaching an advisor is another – and by making yourself aware of your legal obligations, you can ensure that you stick to the right side of the law.

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Meredith Weisser

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