Let us examine some of the most popular strategies for finding good stocks or the art of stock picking. The aim of which is to achieve rate of return that is greater than the market's overall average.
Many investors new to the stock-picking scene believe that there is some infallible strategy that, once followed, will guarantee success in pull out that stock. Unfortunately, there is no foolproof system for picking stocks.
Why?
Many factors affect a company's health that it is nearly impossible to construct a formula that will predict success months after months or year after year.
A lot of information is intangible and cannot be measured like company's staff and competitive advantage among other things.
Human (often irrational) element inherent in the forces that move the stock market, stocks do not always do what you anticipate they'll do.
The bottom line is that there is no one way to pick stocks. Better to think of every stock strategy as nothing more than an application of a theory - a "best guess" of how to invest.
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