Investors.com - Online Lesson

Chapter 1 - Your Stock Buying-Checklist

Emotions can get in the way of even the most astute investor. That's why it's smart to stick to a clearly defined investment plan.

Keep a list of buy and sell rules handy. They'll help you set aside your emotions and logically evaluate a stock's track record --and its prospects.

IBD's Stock Checkup®  tool does some of the heavy lifting for you.

It sifts through a stock's history -  its earnings and sales track record, price action and other essential traits - then rates each category as Pass, Fail or Neutral.

It also tells you whether the market is in a confirmed rally -  a signal it’s OK to buy - or working through a correction.  

The Stock Checkup® tool is a part of the Stock Research section at Investors.com.

Stock Research/Stock Checkup
 

But don’t buy a stock just because it receives a passing grade at Stock Checkup®.

Take a look at its chart so you can determine where it is in its run, and reduce your risk by finding the best time to buy.

And if you want to dig a bit deeper, here’s a handy Stock Buying Checklist to use when sizing up an investment candidate.

Remember that investing isn’t an exact science. Occasionally a stock may not meet the criteria of every single rule exactly. It boils down to thinking of the rules as a list of ideal characteristics that mirror the common traits of stock winners.

So make sure the stock has the basics - a solid earnings and sales growth track record, and a sound base pattern. 

And the more checks the stock receives on the list, the better the odds that it could have the characteristics to climb higher.

The columns on the right side of the Stock Buying Checklist show you where to find the information. Although some of the data is located elsewhere in the paper and at Investors.com, these are the most sure-fire places to find the information you need to size up your investment candidates.