Are you wondering how to start researching stock in 2020? This is a good skill to have, especially if you are wanting to make a habit out of trading. Without this knowledge, many people struggle to get started.
If you want to get into day trading or just need that extra advice to make a difference in your trades, reading this guide will be beneficial to you. Let us get started!
What Your Goal Should Be
Since the pandemic started, the 2020 stock market has been going through periods of swings. Because of this, you should have one specific goal when going your research-
Always avoid buying stocks when they are high and do not sell when they are low. Your research should have the goal of finding out when these swings are occurring.
Find a Long Term Investment
As a trader in an unstable market, you are going to want to find a long term investment. Be sure to research the company’s trends, how they are doing during the pandemic, and what their leadership team is like. This will let you know if they are worth your time and money.
Due to the pandemic, the market is not behaving as it normally would. A long term investment can be just what you need to start getting your income levels back to normal and give you some peace of mind.
Analysts believe that the following fields are going to continue to do well in 2020 and beyond, so these are some stock ideas you can check out. If you need an idea to spark your research start with one of the following areas:
- The food industry
- The legal industry
- Consumer goods
Find the Good Deals
With the market dropping as much as it has, even premium stock prices are way below their typical value right now- making it an ideal time to start searching for some good deals.
Check out the company’s business models and try to predict how they will be once the pandemic is over. If they were able to adapt well, that means that they will still be around in the future as well. Also, be sure to avoid companies that have a lot of debt.
When searching for a good deal, you want to find low stocks that are currently undervalued. Once the economy returns to normal and the pandemic ends, then their prices should raise. You want to think about the future when hunting for solid deals on the stock market.
Four Steps to Researching Stock
- Study the Quantitative Data
- Study and collect data on revenue and income, plus ROE, ROA, and EPS
- Research the company- their leaders and values
- Summarize the research and compare to competitors
Always Research more than Numbers
With all stock dropping in value, you are going to need to learn to research more than just the numbers.
Be sure to become familiar with the stock, its projected price, and the bigger picture of the company. What is their financial situation like? What about goals, values, and leadership standards? All of this is helpful.
Any company that seems like it would not be a good investment should be avoided during these crazy times- even if the price of stock seems too good to be true. If you buy a low stock with the wrong company, it might never rise back up to its pre-pandemic price, meaning that you get left hanging.
Overall, the best advice for stock research in 2020 is just to be sure that you look at all aspects of the company. Leave no stone unturned when decided where you are going to invest this year.
Skylar Hammond is a writer for True Trader who specializes in topics such as stock trading, personal finance, and forex. He focuses on helping beginners and experts alike learn more about the market and improve their trading skills.