| baseline suggestion: don't try to actively manage your own investment portfolio and pick stocks. don't outsource management of your portfolio to active managers that charge high fees. outsource your investment to a diversified low-fee passively managed fund (e.g. those popular low fee diversified vanguard ETFs that use market cap weighting). Such passive investment approaches seem kind of dumb (like, surely one could do better by considering the fundamental economic value of businesses, not merely their market cap) but the average investor will end up wealthier by investing in passive ETFs. One big downside of trying to manage your portfolio yourself is that you have many more opportunities to make unforced errors (particularly behavioural errors), e.g. trading based on emotion, trading based on poor decision making, etc. If you outsource investment decisions to an organisation with a disciplined process and low fees then you prevent yourself from making many of these errors. https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street https://www.bogleheads.org/RecommendedReading.php http://efficientfrontier.com/ On another hand, if you do want to learn more about how to evaluate individual companies: http://aswathdamodaran.blogspot.com/ https://www.berkshirehathaway.com/letters/letters.html https://news.morningstar.com/classroom2/course.asp?docId=142... http://www.efficientfrontier.com/ef/401/fisher.htm https://twitter.com/WallStCynic All that said, research has shown that individual stock selection has a relatively minor contribution to overall investment portfolio return compared to other factors such as asset allocation and (especially) the amount you invest in the first place. |