If you want to be a successful investor, there is no substitute for learning how to buy stocks the right way.
Too many small investors jump into the market without any regard for educating themselves on the fundamentals necessary to enable them to engage in even a minimum amount of real analysis of the companies and stocks they want to buy.
Thoughtful investment strategy requires a thoughtful respect for the necessity of the basics of stock analysis.
There are two basic types of stock analysis that you need to be familiar with if you want to learn how to buy stocks and minimize your risk.
These two types are fundamental analysis and technical analysis, and they both have different roles to play in your assessment of a stock's present and future worth.
Unlike other systems of analysis, these two methods of stock analysis should both be adhered to if you want a complete picture of any stock in which you are interested.
Fundamental analysis of a stock concerns itself with, as you might surmise, the fundamentals.
This includes such things as the stock's growth rate and periodic earnings, among other factors - all of which are included within the company's financial reports.
While this is a very time-consuming process of analysis for both seasoned investors and those just learning how to buy stocks, it is also an indispensable method for acquiring necessary stock information.
Technical analysis, on the other hand, is concerned with things like the stock's pricing history, as well as other details that indicate the stock's overall place within the market.
This information comes in the form of various charts, so a basic mathematical understanding of reading charts is necessary for anyone who wants to learn how to buy stocks.
Having the ability to properly analyze the stocks you intend to buy is a critical component of learning how to buy stocks.
Without it, you are left with only guesswork and the advice of others in determining how to invest your hard-earned money.
Before you begin your investment activity, take the time to at least familiarize yourself with the basics of both fundamental and technical analysis.