How do I know which stocks to buy?
That is a great question. With over 8,000 different stocks to choose from, it can be overwhelming to pick some possible winners.
Many people simply buy stocks that are recommended to them by their brokerages, their friends, or experts from TV, magazines, and newspapers.
Some people buy stocks from companies they think are big, stable, and successful. This may seem like a safe route, but there are no guarantees.
Other people buy stocks based on rumors that the price will rise/fall sharply soon.
Many experienced traders watch financial news on TV, read the relevant newspaper stories, and investigate companies that are in the news. They also use "technical indicators," which are numbers or graphs which may help indicate whether a stock will rise, fall, or stay the same.
A few people will randomly pick stock symbols by throwing a dart at a newspaper, for instance.