Investors are always looking for hot stock tips and the best stocks to buy right now. Afterall, we are all looking to make money and always hoping to find the next Microsoft or Dell that will be a big winner in our portfolios.
There is a problem though, and it is that there is so much information out there that you don’t know what to trust and what to pay attention to. Stocks are like horses: you can always find an opinion and someone willing to give you a tip.
As an example, we can use this MSN money article from today that is titled “7 Cheap To Buy Now”. At the bottom of the article it says it comes from David Landis of Kiplinger’s Personal Finance Magazine. Now the first question is: who is David Landis? The questions go on from there to what are his qualifications, what is his past record, does he personally own any of the stocks, and why only 7 cheap stocks? Why not 10 stocks that are cheap or 20?
There are many such articles that you can find in newspapers, magazines, and online as well as a endless supply of stock “experts” giving their best stocks to buy right now for 2010. But why should you listen to any of them and most importantly, why should you bet your hard earned money on their picks?
The stock market for dummies is what many of these so called gurus think they are dealing with. Unfortunately, we live in a world where people try to become experts and create an illusion of authority which then gives them the ability to sell information or their knowledge and make a living off of it. In the stock market world, there is no shortage of people who have reached “expert” status and make their living by giving opinions.
Regular people often take the advice of these “experts” just because they sound believable and they have no way to check the validity of the expert’s analysis. People like you and I regularily invest hard earned money on stocks they we nothing about just because we read somewhere in an article that it is a good stock pick. Is this really a good way of investing your money?
Opinions are good and it is always a good thing to get as many opinions about anything before you make a decision. Unfortunately in the stock world, I don’t think enough people take the effort to get those other opinions before making a decision to buy a stock or to sell it. This seems a bit strange considering it is real money they are spending.