Stock Analysts

There are many stock analysts (over 3,000) on Wall Street, and yes, they are experienced. But, they don't have a crystal ball. What they do have, though, is the knowledge of market trends and forecasting company performances based on the market's demand for whatever their product happens to be. Some analysts have done an outstanding job of forecasting. That's why it is a good idea to go online and read the various blogs and special reports rendered by stock analysts. You will be able to watch the track record of a particular analyst and perhaps decide to heed his forecasts.

History Often Repeats Itself

Following the predictions of stock analysts can be a learning experience. The greater the number of analysts, who report on a stock, the better the reason to buy, or sell, based on their recommendation. Once you are attuned to what the analyst is basing his predictions on, you will be looking for these same trends in companies that are of interest to you. Draw your own conclusions on some of the same companies the analyst is assessing and then compare his ultimate forecasting with your own. With practice and persistence, you will find that you, too, can follow market trends and past company performance, not as accurately as the pros, of course, but well enough to check on companies that you like that the analyst may not be assessing.

Stock Analysis Software

If you become really interested in stock analysis, there is even software available that assists in picking stocks and gaining a better understanding of a particular company's operations. The software also boasts of being capable of managing an unlimited number of portfolios for your convenience. It is not, however, recommended for beginners. I do believe they have a demo download that can be tried out in advance of purchase, though.

Self stock analysis, based on research

Even though it might be tempting to buy a stock while the price is falling, it's not a good idea, since it will probably fall lower. However, if the stock is over its 50 day moving average, it is probably ok to buy. Stick with companies who have steady financial growth. If revenue growth begins to slow down, there may be reason to fear trouble ahead. Gross margin changes of a company from one quarter to the other may indicate the company's competitive edge is fluctuating, and, if the change is a decline, it may mean that there is more competition in the picture.

All in all, analysis, whether from a financial professional or self-analysis by research can be a good indicator of how a company is performing and could be the difference in making an informed decision about the investments you make or, without the information, choosing a stock that is ready to bottom out. It's all about choices and timing and in the stock market, both are very important.