Stock research and evaluation
Before investing in a stock, it's important
to research the issuing company and understand how the investment
is likely to perform. For example, you'll want to know ahead
of time whether you should anticipate a high degree of volatility,
or more stable, slower growth.
A good place to start is the company's 10-K
report, which it must file with the
Securities and Exchange Commission
(SEC) each year. It's extremely detailed and quite dry, but
it is thorough. You'll want to pay attention to the footnotes
as well as the main text, since they often provide hints of potential
problems.
Other resources
In addition, there is a wide variety of
information available from outside sources — the financial
media, earnings and
dividends
reports, corporate Web sites, online forums, and newsletters —
that can give you a broader perspective on particular companies,
industry groups, and the overall economy.
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