Techniques For Investing in The Stock Market

Techniques For Investing in The Stock Market

Author: Christian Bayonne

Techniques for investing in the stock market come in a variety of flavors. Every investor has its own way of investing. When it comes to stock  investing there are many techniques as there are many investments  to choose from. To help you find and define your style, in this article we will cover the following basic investment styles:

• Value investing
• Growth investing
• Technical investing.

Value Investing
The objective of value investing is to find  the bargains - cheap stocks that are overlooked by  the market.Value investor  look for companies that are financially strong ,with low stock prices compared to their intrinsic value (their growth and earnings).

Growth Investing
In contrast to value investing, growth investing  favors  stocks of companies whose earnings or revenues are growing faster than  the industry or the overall market.  The price-to-earnings(P/E) ratios is very important in the work of growth investor .Growth  companies often have higher P/E ratios which  means higher stock prices.

Technical Investing
Technical Investing is based on the use of technical analysis. Technicians study the charts of stock historical price and volume patterns  as guide to future stock price direction. Such investment style is built on three principles:

-Stock prices and volume patterns are predictive of others
-Stock prices and volume activities have a tendency to follow trend.
-Prices reflect all the available market forces at any given time.

Technical investing, by comparison to value and growth styles,  relies heavily on non-economic factors.

These basic techniques for investing in the stock market  are not for everyone. An investing technique can work for one investor and fail for the other. However, just  remember there are  no perfect techniques and that all these investment styles are complementary to each other. They all give insights about an investment. From these basic techniques, you can define and design your own techniques for investing in the stock market.

Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for the last decade. He is also the co-owner of  Best Stock To Buy in Canada, Europe, US.


Article Source: http://www.articlealley.com/article_1542845_63.html

About the Author: Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for  the last decade. He is also the co-owner of  Stock Picks Canada, Europe, US.

http://www.stockonrise.com