Stock Research Tools and Techniques
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Questions and Answers

Why is it important to narrow down the focus to a manageable number of stocks for research?

  • To ensure all information is available for making informed investment decisions. (correct)
  • To limit the potential for profit by reducing the number of stocks in consideration.
  • To intentionally limit the investment options available.
  • To increase the complexity of the investment process.

What is emphasized as a key rule when narrowing down the field to buy stocks?

  • Avoid researching before making investment decisions.
  • Purchase stocks based on speculative information.
  • Only invest in companies that are trending on social media.
  • Buy stocks in companies that you understand. (correct)

How many stocks are recommended to narrow the search down to if working with print media sources?

  • 10 stocks
  • 25 stocks
  • 100 stocks
  • 50 stocks (correct)

What does the text suggest about the process of finding good stocks to invest in?

<p>It is a process that never stops and requires continuous research. (A)</p> Signup and view all the answers

What is the recommended number of stocks to narrow the search down to if working on the Web?

<p>100 stocks (D)</p> Signup and view all the answers

What is the purpose of locating reliable sources of information on stocks?

<p>To ensure access to accurate and trustworthy information for investment decisions. (D)</p> Signup and view all the answers

What should an investor consider in order to have a real sense of whether a pharmaceutical company is likely to be profitable in the long run?

<p>The company's main products or services (A)</p> Signup and view all the answers

How does narrowing the list of stocks from 10,000 to 100 (or any other number) affect the selection process for investment candidates?

<p>It allows for a more focused evaluation of each stock (C)</p> Signup and view all the answers

What should an investor review when determining their investment strategy?

<p>Investment goals and risk assessment (B)</p> Signup and view all the answers

What type of companies do more conservative investment strategies focus on?

<p>Very large companies that make up the Dow Jones indexes (B)</p> Signup and view all the answers

What is an example of a less conservative but not totally adventuresome investment approach?

<p>Checking stocks of large cap companies but excluding very large stocks (D)</p> Signup and view all the answers

What can investors use to select stocks within a specified range of market capitalization while working on the Web?

<p>An Internet stock screener (C)</p> Signup and view all the answers

What is a shortcut for considering companies listed on NYSE and Nasdaq national market as large cap and mostly mid cap respectively?

<p>$5 billion rule (B)</p> Signup and view all the answers

Where can investors find the names of the 65 companies that make up the Dow Jones indexes?

<p>By checking print media reports on NYSE listings (C)</p> Signup and view all the answers

What should an investor put on paper to bring better focus to the task of settling on an investment strategy?

<p>Answers to investment strategy questions (B)</p> Signup and view all the answers

True or false: Narrowing the focus to a manageable number of stocks for research is not important in investing?

<p>False (B)</p> Signup and view all the answers

True or false: It is recommended to settle for 25 stocks if 50 seems like too many to research?

<p>True (A)</p> Signup and view all the answers

True or false: Early in your investment career, you will learn that researching and finding good stocks to invest in is a process that never stops?

<p>True (A)</p> Signup and view all the answers

True or false: It is not necessary to only buy stocks in companies that you understand?

<p>False (B)</p> Signup and view all the answers

True or false: The text suggests that researching stocks is a one-time process that doesn't require continuous effort?

<p>False (B)</p> Signup and view all the answers

True or false: Locating reliable sources of information on stocks is not important for investing?

<p>False (B)</p> Signup and view all the answers

Is it necessary to be a biochemist in order to invest in pharmaceutical companies?

<p>False (B)</p> Signup and view all the answers

Narrowing the list to only 100 stocks means that you select only 1% or fewer of all stocks as worthy investment candidates.

<p>True (A)</p> Signup and view all the answers

It is recommended to put your investment strategy on paper to bring better focus to the task of settling on a strategy.

<p>True (A)</p> Signup and view all the answers

The options for investment strategies are limited.

<p>False (B)</p> Signup and view all the answers

More conservative strategies focus on the mature, very large companies that make up the Dow Jones indexes of industrial companies, utilities, and transportation companies.

<p>True (A)</p> Signup and view all the answers

A less conservative but not totally adventuresome approach may be to check stocks of large cap companies but exclude very large stocks.

<p>True (A)</p> Signup and view all the answers

Investors working on the Web can use a stock screener to select stocks only in the $1 to $5 billion range.

<p>True (A)</p> Signup and view all the answers

A shortcut for considering companies listed on NYSE as large cap, and companies on the Nasdaq national market list as mostly mid cap is not precise but good enough.

<p>True (A)</p> Signup and view all the answers

Using a stock screener is recommended to locate companies within a specified range of market capitalization while working on the Web.

<p>True (A)</p> Signup and view all the answers

Reviewing investment goals and determining the investment strategy are essential steps in the investment process.

<p>True (A)</p> Signup and view all the answers

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