What's The Best Way To Analyze a Stock?

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If you've read through these slides, you learned two different approaches to understanding a stock and analyzing its performance. You can probably guess which path will most clearly lead you to the best value: It's both.

You shouldn't ignore or discount the basic but critical details contained on the stock summary page or in an earnings report.

In addition, company executives often hold conference calls with analysts to answer more questions about fundamentals; these calls happen when companies report their earnings. They can produce valuable insight into management's strategy.

But you can also round that out with the information you gain from a technical analysis. Once you've analyzed a stock using these methods, you'll have some indications about whether it's a good investment.

After you've done your homework and picked your stocks, watching them grow can be extremely rewarding. Some people even invest in a single stock or two as a fulfilling hobby and a way to learn more about the market, or in the case of company stock, about their own employer.

Keep in mind that professional stock pickers look at many more complex factors. For the rest of us, stock picking should be recreational, and done with money we can afford to lose.

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