Seriously? Did you just ask Google (or Bing or Ask or some other search engine) what might be a good stock to invest in right now?
Do you suppose you’re going to get rich from an internet stock tip? Perhaps you will, but it will be complete dumb luck.
I’m sorry to ruin your naivety, but not even the best money managers in the world can consistently identify good stock investments in advance. Some quite promising looking stocks tank, and others that didn’t look so great surprise everyone and take off.
If you haven’t heard of the Wall Street Journal’s fourteen year dartboard contest where they pitted investment pros against random stock picks chosen by throwing darts, then before you go picking your own stocks, you best read up on it in Can Monkeys Pick Stocks Better Than Experts?
How Can You Find Good Stocks to Invest In?
The smartest people in the world are scouring the market every day looking for good stock picks. This means good opportunities are spotted fast and an undervalued stock’s price quickly gets bid up to fair value. Do you think you’re going to get lucky and spot some amazing opportunity that everyone else missed?
Most people who made a lot of money from a good stock investment did it the same way a lottery winner does; they were in the right place at the right time. Maybe they worked for a company like Microsoft, Apple or Google, who gave them stock as part of their compensation package.
Or maybe they just happened to make a bet and put all their money in a stock that did well. Just because they won that bet doesn’t mean it was a good investment. It was luck!
A Better Way
I think a better option than picking individual stocks is to bet on capitalism. I don’t know which particular stock might be best from year to year, but I do believe that over time publicly traded companies are in business to make money and collectively I think they will do so. I can own just about all the publicly traded companies out there with a single trade by using one or two index funds. No, I’m never going to double my money in a month, or even in a year, by using index funds, but I’m not going to lose it all either.
- You can get a baseline comparison of the difference between index funds and stocks in What Would I Do – Buy Individual Stocks or Stock Index Funds.
- I’d also suggest you check out Risk in a Stock vs Risk in an Index Fund.
If you are really searching on the internet for “good stock investment” or “what’s a good stock to invest in right now” you need to get some common sense. By the time such a tip made it to the internet, don’t you think lots of people would have already bought that stock by now?
You need to get some street smarts. There are message boards that will promote particular stocks, and they are not always on the up and up. Sometimes someone who owns a thinly traded stock will start putting out messages hoping to make the stock they own popular so when the price goes up a little they can dump it. People like you searching for a good stock to invest in get left holding the bad investment.
Learn How to Invest
What you need to do is get a few classic books on investing and learn what you are doing before you lose all your hard earned money.
- I’d start with Four Pillars of Investing by William Bernstein.
- Then check out A Random Walk Down Wall Streetby Burton Malkiel.
- Next read The Intelligent Investor by Benjamin Graham.
- And you have to check out The Big Investment Lie by Micheal Edesess. As a matter of fact this last book was written just for you, because right now, based on what you are searching for, you believe the big investment lie.
Read these books. Then if you’re still convinced you can find the best stocks to invest in by asking Google, well, then, go right ahead.