Wednesday, September 2, 2009

Stock Market Recommendations - How to Make Use of Them

This is the twelfth and final article helping you learn how to make money in the stock market. Search for "Learning the Stock Market" to find the first article which lists the entire series.

Where can I find reliable stock market recommendations? Well think about this carefully. Make sure you're reading the best financial newspaper. Here you should find plenty of excellent stocks featured along with their charts and supporting fundamental data. They may not be under the heading of recommended stocks but they could prove to be some of your best leads. Be very wary of specific recommendations.

What interest does the person recommending have in the stock? Will he carry your loss if all goes wrong? Will he tell you when to sell? Do you want to be reliant upon this individual and not really know why you are buying a stock? If you want to develop truly independent financial security you need to be the one recommending stocks to yourself (and possibly you friends and family!) based upon a sound educated analysis.

How do I know if a recommendation is any good? Take a look at the recommended or featured stock and see if it fits your criteria for potentially being a leader. Does it's fundamental data stack up? where is it in terms of building a base on it's chart? Does the corporation have a new feature? Are leading institutions buying it? Where does it sit in it's group in terms of financial performance?

So what do I do with a stock market recommendation? Anything that has a generalized fit on fundamentals may be a decent candidate for your watch list. You watch list should develop into about 80-100 stocks over time. More than this and you will not be able to keep tabs on what is going on but less than 40-50 and you're probably missing some action out there. Keep browsing and pruning your watch list - don't let it become unruly and keep cutting out relative poor performers to make room for up and coming leaders. During a downturn you will find your list naturally shorter.

In fact your list can help to confirm other signals that the market is preparing for a turn. You'll start to find more and more candidates are coming through your screening and reading activities around that time. Develop good and regular habits perhaps consider analysing 1 or 2 stocks in more detail every day - that will give you a list turnover of roughly 10 stocks per week. Of these, likely only 1 will stand head and shoulders above the other 9 but you don't need many provided they are the right ones!

Put analysed stocks that are not up to scratch in a separate list and the excellent potential winners in a short list. Keep your general watch list separate and in this way you keep your work organised and wont be missing opportunities or duplicating work. Hope you found it informative reading about Stock Market recommendations - How to Make Use of Them. There are no more articles in this series entitled Learning the Stock Market. If you missed any just search under Bill Benson to find them all. I hope you've found it profitable to follow along.

More free lessons and educational resources are available at

It can be confusing and daunting to know where to start but there are some outstanding free resources available to help you on your way to independent financial security.

I'll also show you where to find the best and most cost effective paid products to support you in your progress.

As for me...I've lived in different countries around the world and enjoy traveling. That's the beauty of trading - you can do it from anywhere in the world that has a connection!

Bill Benson

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