Are you looking for the best stock watch strategies for newer investors? When it comes to investing, knowledge is perhaps the most important asset for any investor, and the more up-to-date knowledge is, generally the more valuable said knowledge is. That’s why many investors set up a certain number of stocks to watch and then act accordingly.
There are many different ways to invest in stocks and other financial assets and it is difficult to come up with a one size fits all trading strategy. Each investor will have to formulate an investment style that suits his or her own needs and skills, but one great starting point is to create a list of stocks to watch.
Narrowing Down Your Stock Watch List
Fact is, there are thousands of stocks listed on American stock exchanges, and many thousands more listed on stock exchanges all across the world. It doesn’t matter how intelligent you are, following every single stock is simply impossible. Simply put, there are too many stocks to watch. That’s why you need to narrow down your stock watch list to a manageable number of stocks.
What stocks you put on your stock watch list will depend largely on you and your investing style, as well as skill set. You might decide on a select number of penny stocks to watch, or you might narrow your list down by industry. For example, let’s say you spent 20 years as an oil and gas engineer. If this were the case you’d probably have a tremendous amount of information and knowledge of the oil and gas industry, so wouldn’t it make sense to focus on companies in such industries?
Short List for Diversification
Of course, diversification is generally the best idea for investors of every type. One way you can achieve diversity is by setting up short lists for each category of companies you plan to follow. You might set up a list of entertainment stocks with Disney, Sony, Netflix and others listed on it. You might then set up a list of penny stocks to watch, and also another one with tech firms like Google, Apple, and Microsoft.
Watch Out For Developments and Volatility
Once your list has been set up you need to make sure that you follow the listed companies very closely. You should be watching things like stock charts, financial reports, and other commonly monitored pieces of information related to stocks. You should also keep a close eye on the regular news cycle. If there are any major developments regarding the companies on your list, you need to be aware of them right away.
Company stocks can move up and down very quickly based on news and recent developments. That’s why it’s a good idea to pick a list of stocks to watch on a constant basis. Think of this, in August of 2015 the Chinese stock market suffered a massive devaluation. On August 24th the American stock markets suffered a steep downturn, losing hundreds of points.
By the time markets had bottomed out Apple share prices had dropped over $10 dollars, a huge loss even for a massive tech firm. However, savvy investors who were keeping an eye on Apple would have seen this as an opportunity to pick up stock on the cheap. Apple quickly rebounded and ended the day down only a few dollars. This means if you had picked up stocks when it was bottomed out, you would have made some money.
It’s hard to keep track of every single stock out there, so a better idea is to come up with a list of stocks to watch. Once you have this list you’ll be able to track all of the market movements of various stocks and will be able to keep your eye out for good deals. So make sure you come up with your own stock watch list and keep track of it daily, hourly, even minute-by-minute.