Evaluating stocks is complicated because the
companies that issue the stocks are complicated. A company's fortunes,
and so the fortunes of its stock, depend on a vast array of factors,
including market demand, competition, legislation, technology,
the general economic climate, and the skill of its management,
to name a few.
So if you're interested in investing in stocks,
you'll need to find some ways to choose among the thousands that
trade on U.S. markets.
That's not as difficult as it may sound.
You can get the company's perspective about itself and its
stock from the
annual report
to shareholders, usually available on the
company's Web site. And you can take a look at the detailed
and less glossy annual 10-k report the company files with the
SEC.
You also have access to the opinions of the investment
analysts
who evaluate stocks. Analyst reports can help you confirm your
opinion of a stock's prospects or draw your attention to
concerns that you might not discover on your own. Your broker
or adviser can always help you track down the reports you need
or send you those he or she thinks might interest you —
or those that feature stocks the firm is advocating.
Sam Stovall, Chief Investment Strategist, Standard & Poor's
