Published by FrankNez team.
As an investor, expecting high returns from investments is normal.
And to get higher returns and be a successful investor, you must be good at picking the right stocks.
So, how can you become a successful investor?
It’s possible if you always do systematic analysis and study a particular stock and the company before investing in it.
Systematic analysis helps you determine whether it’s a good or bad stock and if it will be a good investment for your portfolio.
It is also important because the analysis result allows you to decide if you want to choose a short or long position.
A big part of the systematic analysis approach involves studying various stock reports such as the Power Gauge Report.
In this article, we’ll tell you about the Power Gauge Report and how effective it can prove for your success as an investor.
Which Kind of Management Do You Follow?
If you rely on systematic analysis to choose stocks for your portfolio, you practice active management of your investments.
Using active management means analyzing a potential company’s financial statements with keen attention to financial ratios.
Investors with active management practices also study the firm’s rivals, the sector, and the industry in which the firm operates.
So, this practice involves a lot of research and analysis.
On the other hand, passive management practitioners are those investors who purchase passive investments such as mutual funds or Exchange-traded funds (ETFs).
Suppose you want to engage with your investments actively but don’t know much about how investments work.
In that case, you can easily gain in-depth knowledge from well-regarded Marc Chaikin’s Newsletter, famously known as the power gauge report.
What is the Power Gauge Report?
Power gauge report is a superior monthly subscription analysis newsletter from Chaikin Analytics that helps investors who practice or want to practice active management of their investments.
The Power Gauge Report from Chaikin Analytics is a monthly subscription research newsletter.
It helps its subscribers to identify under-the-radar breakthrough firms using advanced analytics and methods.
And its cutting-edge algorithm system can identify assets or equities with high-profit potential.
If you’re interested in a high-quality investment newsletter, it is also worth checking out ASR.
Can Power Gauge Report Help Pick the Right Stocks?
The Power Gauge has the ultimate goal of predicting the direction of the stock for the next three to six months.
And it has been fairly successful at it in the past and makes incredibly accurate mid-term forecasts every time by analyzing thousands of publicly listed companies.
Subscription to this report gives you access to Chaikin Analytics’ research tools and a full year of monthly publications.
Its current offer includes some additional bonus materials to make your research more accurate.
Assume you want to do technological research to choose your stock.
You will get a new mid- or large-cap stock recommendation monthly and other benefits.
So, you can put your trust easily in this power gauge report to pick the best stocks.
How to Pick the Right Stocks?
You must do a lot of research to select the right stocks.
Which stocks are perfect for you depends on how you want to organize your portfolio, your goals, and your expectations from a specific stock.
You need to set your goals, identify your investment type, diversify your portfolio, and stay informed – only then your chances of picking the right stocks will be higher.
Let’s briefly discuss these steps so that you can find the perfect stock for yourself next time.
1. Set your Goal
Before anything else, you need to define your investment goals. Making money can’t be a precise objective. You need to determine what you want to do with that money.
- Do you want to supplement your income?
- Are you investing for retirement? Or
- Do you want to protect your wealth?
Ask these questions to find out your goal for investing. Your objective will guide you to decide the period of your investments: short-term or long-term, and the rate of return you desire from your investments.
As a result, you can easily find the equities that are consistent with your goals and invest in them.
- Identify Your Investing Style
Typically, there are three types of investors.
- Investors who seek income,
- Investors who seek wealth preservation, or
- Investors who seek capital appreciation.
You must understand among these three categories which kind of investor you are and your investment style to build a perfect stock portfolio.
Investors Who Seek Income
If you are an income-oriented investor, you should purchase and hold stocks of firms that frequently pay a high dividend.
These types of firms are solid, reputable, yet slow growing in the industry, such as information technology and utility companies. You may also seek investment opportunities in trusts, bonds, and limited partnerships if you are this kind of investor.
Investors Who Seek Wealth Preservation
If your investment goal is to maintain and preserve your wealth and have a reduced risk tolerance, you should put your money into reliable, well-established, and blue-chip firms.
Firms that work with consumer staples can be a great option to invest your money to preserve your wealth. Because these types of companies thrive in both good and bad times, ensuring they are doing good business.
Investors Who Seek Capital Appreciation
If you are a risk-taker and seek capital appreciation from your investments, you should invest in stocks of firms that do well throughout their first growth years. Take the risk and reap the rewards.
3. Diversify Your Portfolio
Regardless of your investment style and goal, you need to diversify your portfolio to reduce exposure and risk.
Suppose you are a risk-averse and conservative investor and invest in firms that show long-term growth, but you should invest in stocks of new companies even if it seems risky.
On the other hand, buy a few blue-chip stocks even if you are an active investor and risk-taker. It will compensate for other volatile stock losses if needed.
4. Stay Up to Date
If you want to pick the best stock in different market scenarios, you must stay on top of market news, and the mood of the market.
- Keep up with current trends, events, and options trading opportunities in the industry you have decided to invest in.
- Follow industry blogs written by authors who have a similar perspective to you or include information that interests you, which is called passive research. Some passive investors even construct their portfolios based on blogs and articles.
5. Discover Companies
You must have the ability to recognize the best firms to invest in. This step is also very important in the stock-picking process.
You can use a screener to organize a group of stocks based on parameters, such as sector and industry.
Using screeners also allows you to filter firms by important investing criteria such as dividend yield and market capitalization.
Based on your interest, you can also track the industry’s performance, look for exchange-traded funds, and look at the firms they invest in.
And you can use financial news releases, stock analysis articles, and the blogosphere to look for opinions on companies in the sector or industry of your interest.
6. Determine Price and Safety Margin
In this final round of stock choosing, you should identify low-priced stocks from firms that satisfy your valuation targets.
Buying stocks that are priced significantly below their intrinsic value can save you a lot of money in a situation where your other stock decision turns out to be wrong.
On the other hand, note that a company with steady profits and a promising future may not require a large margin of safety.
Simply subtract 10% from your desired price to determine your entry point in such situations.
However, you may want to maintain a higher safety margin for growth companies with less predictable profits.
In such cases, aim for a 15% -30% discount in their stocks to reduce the loss if things don’t go as planned.
Moreover, just do enough research about the firm and the market to be confident that you’re making an informed decision.
Other Facts to Consider
As an investor, you should also consider the following factors about a company to pick the right stocks.
- Check the P/E (Price/Earnings) ratio of the company. Companies with lower P/E ratios are suitable for investment.
- Check if the company has higher EPS (Earnings Per Share) because a high EPS is a positive indicator for investors.
- Check if the company has a steady improvement in ROE (Return on Equity) as this is also a positive indicator.
- Check for the company’s solvency.
- Consider the effectiveness of the company’s executive leadership.
Picking the right stocks requires much analysis, research, and expert advice.
Always be informed about what’s going on around your preferred industry and sector to bag the perfect deals.
However, the Power Gauge Report can be a great tool for finding stocks that are suitable for you and satisfy your goals.
So, getting a subscription will be a wise idea if you want to engage in your stock management actively.
Always remember that picking the right stocks is a multi-stage learning process.
You will need to devote a lot of time and gain a lot of experience before you can call yourself a truly successful investor.
You can follow FrankNez on: Twitter | Facebook | LinkedIn
Related: My Top Picks of Stocks to Invest in Right Now
Let’s start a discussion! Leave your thoughts below.