Stock Picking Strategies | Stock Picking Strategies You Must Avoid


If you want to learn how to pick stocks, you need to observe how investors play them. However, just because they have their own style doesn’t mean you should blindly copy them. You must learn stock-picking strategies so you can make your own financial decisions. Investors usually follow common patterns like the value pickers who buy businesses at a low price and then there are the growth pickers who buy stocks that grow at a high rate and then there are the income stock pickers who invest in stocks that have huge dividends.


Yes, you can learn from them, but you should not base your decisions and simply follow what they do. Although there are no hard and fast rules in making money from stocks, you can learn a thing or two from seasoned investors.


Beware of Fake Experts and Bad Advice


Anyone can give you advice and offer stock tips whether it’s from an app or a friend or an acquaintance and we are pretty sure that at some point you were tempted to give it a shot just to see how it goes.  Before you make an investment you must realize that this is one of the riskiest stock-picking strategies out there. If you base your investment on mere tips and suggestions you should invest that money on the lottery because it’s such a huge risk.


Furthermore, most of the free tip you’re getting on your phone through WhatsApp or SMS are actually scams. Yes, that’s right. They are scams and you should not believe them. If you are serious about investing you shouldn’t just listen to anyone whether it’s a friend or a neighbor or a family member. If they tell you to invest don’t push through with it unless the person talking to you is an investment advisor or a research analyst, otherwise, you shouldn’t base your investment on their recommendation because there’s a big chance you’ll regret your decision.


Selecting Investments Based on How Big-Money Investors Spend


If you are planning to use this strategy we highly suggest that you stop right there. Not only is it dangerous, but it’s also very risky. You cannot just invest just because a big investor recently made one for a number of reasons. Firstly, big investors are not afraid to take risks. Even if they incur big losses they have enough resources to keep them afloat. Unless you have sufficient resources and numerous strategies to cope following losses then go ahead but if you don’t, it’s not a good idea to just follow seasoned stock market players. While it’s true that you can learn from them, it’s not wise to blindly follow them. Observe their patterns and do your own research.


Picking a Stock Because It’s Continuously Increasing


When it comes to stocks, most people think that a good reason to buy is when the prices go up and a good reason to sell is when it goes down. This is not how you do stocks. In fact, it’s wrong to think that you’ll pick stocks just because it’s continuously going up simply because the movement of stock prices doesn’t tell us anything.


If you are going to base your decision on movement, you will not appreciate the results. You must look at the bigger picture like understanding the basics, knowing quarterly and annual results and reading about corporate news and announcements to get a good grasp as to why the price shifted. Before you make any decision, make sure that it is backed up by research and analysis instead of just looking at price movement.


When it comes to investing in stocks don’t rely on your intuition or your gut because in most cases, the results don’t turn up well. Base your decision on fundamentals and analysis and get all the information you need about the company, its financials and any other news related to it to avoid disastrous decisions.


Get Stock Advice from the Pros


If you are in need of some guidance on stocks, Gorilla Trades can help you. Gorilla Trades is the complete solution for today’s modern investor and has been a trusted resource for thousands of investors, stockbrokers, and fund managers for over 20 years. Whether you’re interested in learning how to trade stocks, just starting to build your portfolio, or you’re an experienced investor looking for powerful stock picks; take your portfolio to new heights with Gorilla Trades! We look forward to hearing from you.