How do you find the best stocks that will make you the most money? My first piece of advice to you is this: the next time you read an article that says it’s easy, stop reading the article. It is far from easy. Watching the sun rise is easy. Finding the best actions, like losing weight, is difficult and takes time, patience and discipline.
First, let’s look at the weather. Once you get past the sensationalist articles telling you how to get rich with little or no investment knowledge, you’ll find the real experts saying it will take no less than an hour of research on every stock you own every week. . In order to be diversified (have stocks in different areas of the market to avoid huge losses) you will need at least 5 stocks, so no less than 5 hours of research per week and a little more will be needed.
Then be patient. If you’re one of those people who love watching your stocks move tick by tick in real time on the screen, I’m with you. The truth is that picking the best stocks is largely about picking boring stocks that will appreciate over time. You can still watch your computer screen, but you’ll have to hold them for more than a day or two. With almost every stock I buy, I’m looking to hold out long enough. Having an exciting stock is good, but your wallet can be full of it.
Finally, discipline. In Jim Cramer’s book, Real Money, he lays out a series of easy rules to follow when picking the best stocks. Along with that, it gives you more rules for when to buy and when to sell. It may seem like a lot of rules, but being disciplined means following rules and that’s how the best investors make money.
If you don’t have time or aren’t sure you can pick the best stocks, consider subscribing to a service like Action Alerts Plus where an expert like best-selling author and CNBC commentator Jim Cramer does your search for you and all you have to do is buy and sell when it tells you to execute the trade. My secret is that I don’t have enough time to do all my research, so I let Action Alert Plus do it for me.
The average part-time stock market investor does not make money in the stock market. It’s largely because we’re not doing a good job of investing enough time, being patient, and being disciplined. Action Alerts Plus will pick the best stocks for you.