So you’ve finally made it to this point. You feel like you know enough about the stock market to start looking around for shares to buy. Maybe you’ve even chosen a stock broker. You’re probably excited, a little nervous even. Maybe you got permission from a spouse to invest $10, $100, or even $1000 to start. Or maybe you’re on your own and have a large disposable income and can start investing in the big leagues right away.
Whatever stage you are in, finding the right companies and shares to buy is one of the most time-consuming thing a stock market trader will do. You may spend days, even weeks researching a company, it’s stock, past performance, competition, and more, only to decide that you don’t want to buy shares of that company. That means you get to start over and begin the journey again.
It can be hard knowing where to even start to look for the right company to purchase shares in. Luckily there are dozens of resources available out there that can help you get started, and do a good amount of searching for you. Here are some of our favorites.
Most people don’t realize that they probably already know dozens, or even hundreds, of companies that are publicly traded and offer shares to buy. Most stock market experts agree that the best place to look for companies to buy share of is in your own backyard. You’ve likely noticed a company in your vicinity that seems to be killing it. Maybe it’s a restaurant that is packed 24/7 such as with Chipotle stock the last few years. Many people noticed that everyone was talking about the restaurant and their amazing burritos. Stock market investors would drive by Chipotle stores and see lines at 3 PM. Chipotle stock nearly quadrupled in just a few years as they quickly grew in both popularity and profits.
Another great example is Apple stock. If you are reading this I an virtually guarantee you have heard of an iPhone. When did you first hear about it though? Probably five or six years ago. You probably thought to yourself what a great idea that was, imagining a day when everyone would own a phone like that.
Let’s look at the chart and see how much profits could have been made with a $1000 investment in Apple a year or so after the iPhone was introduced.
Apple stock climbed from $16 to $125 in a period of about eight years. This means that if you had invested $1000 in 2007 you would have $7,800 if you had sold near the peak. That is 8x the original investment, and you would have been investing in a company that you were familiar with.
These kinds of opportunities come up quite a bit more than people think. Mindset is everything. There needs to be a change in the way you look at the world. You must become an opportunist. View the world as a giant cauldron of opportunities, waiting to be found and used. Keep an eye out for those opportunities and you will be surprised how many fall in your lap.
Use Your Broker
If you have already chosen your broker you may have already familiarized yourself with their trading platform. Some brokers charge more per trade (around $10 each time you buy or sell shares), but offer great platforms to help traders find and analyze shares to buy. Other brokers, such as Robinhood, offer almost no software besides what is necessary to buy and sell shares of stock, but offer completely free trading. Luckily you can have the best of both worlds.
Most brokers offer a free account that can give you access to their trading software platform, without actually being forced to use them to make trades. A great example is TD Ameritrade. You can sign up for a free account on their website, giving you access to their incredible software to help find stocks with charts that show potential for growth. You can then make the trades using your Robinhood app free of charge. We would only recomend
One of the easiest ways to find shares to buy on TD Ameritrade is through their Trade Architect platform, a web-based stock trading platform that gives the user the ability to search out stocks that fall into a specific set of parameters.
As you can see in the dropdown box to the left, there are different ways to look for stocks based on what kind of stock market trader you would like to be. Potential reversals come when a stock with a price that has been falling for awhile looks like it is about to level out and start climbing again. The software uses complicated algorithms to determine what patterns are starting to occur. You can also choose from strength plays, stochastics, value candidates (solid companies), fundamental plays, and candlesticks. Each of these will be explained in separate lessons.
Once you have figured out what type of trader you are you can start looking for stocks that are a good buy right now. It is incredibly important to note that you do not just buy a company that looks good from the outside, especially if you plan on trading stocks semi-actively. Even the best of companies have periods, or even years where their stock price falls dramatically. That is why you need to find a good company with charts that are also confirming that it is time to purchase shares of that stock.
The best broker for finding stocks to buy is probably Motif Investing. Motif allows you to buy an entire bundle of stocks (up to 30!) for only $10. They also have a really strong social aspect where you can view bundles (motifs) that other people are doing well with and match their motifs. Check out our Motif Investing review to learn more and sign up for Motif!
The image above is called a heat map and is also available through Stocktwits. A heat map helps you to look at different industries and see the general sentiment among stock market traders. You can click on different sections and see specific stocks as well. Once again this gives you the sentiment on Stocktwits, this is not conclusive information, but can be helpful when searching out which shares to buy.
If you have heard of Twitter then you already understand what Stocktwits is. Stocktwits is a community of stock market traders that give each other free stock tips and exchange ideas on companies. Just as Twitter uses hashtags, Stocktwits uses a $ sign followed by the stock symbol. You can follow different stocks that you are interested in and see what other people trading on the stock market have to say about the stock. Please note that we recommend using Stocktwits to help find value stock picks, but not necessarily for determining if shares of stock should be purchased or not. Every stock on Stocktwits has people that are bullish and people that are bearish and most of them have a good reason for their position. Sometimes beginning stock traders will get caught up in a community and put large sums of money in a stock because the community is making it sound like the stock price will quadruple in days. This is rarely the case. Don’t get caught up in the fervor of a single stock on Stocktwits.
Follow the Money
The real fact of the matter is, no matter how much research you do and no matter how well you learn how to pick which stocks and shares to buy, there are big hedge funds and investment brokers with a significantly more resources. These institutional investors have access to incredible minds, super computers, company contacts, and more. You have probably heard of Warren Buffet, one of the best investors in modern times and a multi-billionaire.
When an institution purchases shares of a stock they usually purchase extremely large quantities. This means that the volume of a stock, or how many shares are sold in a single day, will likely start to climb as an institution buys in. Usually when institutions buy shares they space it out over a couple weeks, which means if you see a stock with a 10-15% increase in volume over a period of a week or two, there is a good chance an institution is getting in. You can use your broker, or any number of different screeners to see which stocks are seeing volume increases.
Another solution to tracking institutions is the iBillionaire stock portfolio. A lot of billionaire investors and investment funds report on which stocks they purchase shares in. A lot of stock market investors choose to simply follow what these billionaires are doing and instead of choosing which shares to buy, they just mimic the big institutions and billionaires, who you can be sure have done their homework. This strategy does work, but please note that you will usually be a few months behind, and often when market traders hear of an influential investor purchasing shares in a company they all buy in at once and the price can spike dramatically.
Websites offering free share tips and advice on which shares to buy are a dime a dozen. Some of them are compensated for offering the tips, others have very little experience trading and are just out to make a buck. Barchart.com has one of the better free stock searching software‘s available. They offer 100 stocks with signs of growth each day. Beginning Stock Trader has followed barchart.com for quite awhile and has seen good short-term results via their software.
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We do extensive research and offer 1-2 stock tips each month. We will never claim to know for sure where the price of certain shares of stock are going. We do, however, do a lot of the legwork and offer a lot of sources. We always encourage our followers to do their own research and decide if the stock is right for their strategy. Sign up for our value stock tips newsletter here.
The fact of the matter is you can find millions of free stock tips, stocks to buy, companies to buy shares in, and more on the internet, or just asking a friend of neighbor. The real market trading skill comes from the ability to look at a stocks fundamentals and technicals and make an informed decision on the future stock price. Beginning Stock Trader offers multiple cost-effective courses on both fundamental and technical analysis on our online stock courses page.