Becoming an investor does not need to be an overwhelming task if you learn some basic principles. The first thing to remember is there are no absolutes. Any great stock can become a stinker overnight through no fault of their own. Events like the weather or a natural disaster, a major corporation filling for bankruptcy or chapter 11, or the public losing confidence in a business can affect the price of a stock or an entire sector.

Savvy investors need to keep up with current economic trends by reading the business sections of their local and national newspapers, as well as listening to the business news television stations. CNBC and its web site is one of the best resources. Other web sites like Yahoo’s Financials, has easy to understand articles and stock researching tools.

Begin your investing by deciding what your goal is, your strategies will be different depending on the final outcome. Are you investing for your IRA? Do you want something for the short term? How much time do you want to spend keeping tabs on your investments? The riskier the investment, the more time you need to spend in research.

You could also consult a stock broker or an analyst (a paid person that guesses about the economy), or learn to look for the information yourself. There are certain things to look for to help guide your stock picks. Remember, these are only guides and in no way are a guarantee you will not lose money.

Many of theses items can be found for free on the Internet. Yahoo Financials is a good place to start looking for stocks. Click on the Finance tab, then Investing, then Education. Familiarize yourself with the terms below. Then start Yahoo’s stock screener.

Click on Investing, then Stocks. You will find a wealth of information here. The novice investor should start with the terms below. Click on the stock screener tool in the upper left corner, next, click on “Launch Yahoo! Finance Stock Screener”.

Click in the “Criteria” box and choose some of the below options, then click on “Run Screen” when finished. Experiment with different options. The results can be exported to a spreadsheet and to a portfolio.

To go directly to an individual stock, click on its symbol. To find other items of interest for an individual stock, click on the links on the left side of the page. Try the following options and use these percent ratios as a guide:

PROFILE

Company Name & address information

Sector

Industry

Business Summary

YAHOO KEY STATISTICS

Valuation Measures

Forward Price-to-earning ratio of 16.4

Median price-to-book ratio of 2.3

Trading Information

Average beta of .75

Dividends & Splits

Average dividend yield of 2.4%

ANALYSIS ESTIMATES

EPS Trends

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