31 Questions
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.
What is emphasized as a key rule when narrowing down the field to buy stocks?
Buy stocks in companies that you understand.
How many stocks are recommended to narrow the search down to if working with print media sources?
50 stocks
What does the text suggest about the process of finding good stocks to invest in?
It is a process that never stops and requires continuous research.
What is the recommended number of stocks to narrow the search down to if working on the Web?
100 stocks
What is the purpose of locating reliable sources of information on stocks?
To ensure access to accurate and trustworthy information for investment decisions.
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?
The company's main products or services
How does narrowing the list of stocks from 10,000 to 100 (or any other number) affect the selection process for investment candidates?
It allows for a more focused evaluation of each stock
What should an investor review when determining their investment strategy?
Investment goals and risk assessment
What type of companies do more conservative investment strategies focus on?
Very large companies that make up the Dow Jones indexes
What is an example of a less conservative but not totally adventuresome investment approach?
Checking stocks of large cap companies but excluding very large stocks
What can investors use to select stocks within a specified range of market capitalization while working on the Web?
An Internet stock screener
What is a shortcut for considering companies listed on NYSE and Nasdaq national market as large cap and mostly mid cap respectively?
$5 billion rule
Where can investors find the names of the 65 companies that make up the Dow Jones indexes?
By checking print media reports on NYSE listings
What should an investor put on paper to bring better focus to the task of settling on an investment strategy?
Answers to investment strategy questions
True or false: Narrowing the focus to a manageable number of stocks for research is not important in investing?
False
True or false: It is recommended to settle for 25 stocks if 50 seems like too many to research?
True
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?
True
True or false: It is not necessary to only buy stocks in companies that you understand?
False
True or false: The text suggests that researching stocks is a one-time process that doesn't require continuous effort?
False
True or false: Locating reliable sources of information on stocks is not important for investing?
False
Is it necessary to be a biochemist in order to invest in pharmaceutical companies?
False
Narrowing the list to only 100 stocks means that you select only 1% or fewer of all stocks as worthy investment candidates.
True
It is recommended to put your investment strategy on paper to bring better focus to the task of settling on a strategy.
True
The options for investment strategies are limited.
False
More conservative strategies focus on the mature, very large companies that make up the Dow Jones indexes of industrial companies, utilities, and transportation companies.
True
A less conservative but not totally adventuresome approach may be to check stocks of large cap companies but exclude very large stocks.
True
Investors working on the Web can use a stock screener to select stocks only in the $1 to $5 billion range.
True
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.
True
Using a stock screener is recommended to locate companies within a specified range of market capitalization while working on the Web.
True
Reviewing investment goals and determining the investment strategy are essential steps in the investment process.
True
Learn the methods for narrowing down the range of stocks to research, understanding the limitations of stock research, finding reliable sources of information, and developing a sense for investing in stocks.
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