Picking stocks is an intimidating process. There are 11 different stock market sectors, 69 distinct industries, and thousands of publicly traded companies across the major U.S. exchanges. How on earth can anyone – let alone a beginner – pick stocks that are primed to do well?
Right off the bat, you should know there’s no foolproof algorithm or formula that will ensure success. As many stocks as there are, there are thousands more investing philosophies, schemes, strategies, and mindsets that investors use to approach the market.
As a newer investor, or even as an experienced market participant reexamining your approach, it’s helpful to understand the following principles. Here are five things you should know before picking stocks.
This post originally appeared at U.S. News & World Report.