Basics

The best investors read a lot, since in order to make a good decision about an individual stock, investors not only have to understand the company, but they also need to look at the bigger picture.  This includes the industry and other factors that might impact the stock and the stock market in general.  Obviously, any news coming directly from a company will affect the stock’s price.  Good earnings or corporate expansion can cause a stock’s price to go up.  Poor sales and profits can cause a stock price to go down.  However, there are many other “news” stories social, economic, political, local or global that can affect a stock’s price.  You must also review news on the stock’s industry and its competitors.  You should become familiar with business cycles and economic indicators.  Looking at broader trends might give you a heads up on the direction of the market, so you can take advantage of it.  Finally lots of things can impact a stock; the more you read the more you will be able to spot trends and get ahead of the curve (see Stocks: Buying, Selling & Researching).