Jim Gibbon’s post on contingency management, the act of daily writing practices, got me thinking about simple investment practices. Many of us investors, including myself at times, simply glance at our portfolios, read up on a couple news tidbits, and go about our business. The application of forced investment research may be the cure for investors who are seeking great stock buys. All you have to do is dedicate 10-15 minutes a day to researching 1 new stock.
Getting Familiar With Stock Screens
In order to find more great stock buys, you can begin your search using a stock screener. Stock screens eliminate any unnecessary work on your part because you set the criteria and the screen returns your desired results. Once you get the results page, order the stock results by a key metric like P/E Ratio, Debt to Equity, etc. Now, you can browse a long list of stocks quickly and effectively without a ton of guesswork.
Strive For Quality Stocks, Not Quantity
I feel it’s more beneficial to uncover 1 great stock buy than 3 or 4 mediocre stock picks. Unless you’re a day trader, many of your investments will stretch over a long period of time, at least 1 year preferably to avoid the short term capital gains tax. That means quality should be your main focus, not quantity. If you only find 1 good stock pick in 10 minutes, then add it to your watch list and repeat the steps the next day. At the end of the week, you will have 5 new quality stock picks sitting conveniently in your watch list.
Rinse and Repeat Your Stock Searching Method
Once you begin using this technique effectively for over a month, then you will really experience the true benefit of consistent stock picking research. You should have introduced yourself to 15-20 new companies that sell stock at an attractive price. If your goal is to only buy 1 new stock a month, simply look over your “Potential Buys” list and pick the most attractive stock at the lowest price.
Time Commitment: 10-15 minutes a day
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.