Okay so, everybody is looking for the best stocks to buy right now. That means they are looking online for stock tips and probably listening to radio shows and watching business show on television as well hoping for tips.
There are stock experts all over the place that are more than willing to throw out a few names of stocks you should own. But why should you follow their advice and why are they recommending them?
Take a look at this 3 page article from Michael Brush on MSN Money about 14 stocks that he says are safe to own right now. It is one of many such articles you can find on the Web on any given day that give you a few stock picks and then outline why they are a good bet right now. But take notice of the last line in italics that is under his piece ( it is displayed below).
So, after doing all that recommending and analysis, it turns out that Mr. Brush does not own any shares of any of those companies he calls safe. I think that’s pretty important. I want to make sure you know I am only using his article as an example of thousands of others like it and I have nothing against Mr. Brush.
Now, stock picks are a tricky thing. If he did own shares of some or all of those companies you might be able to make the case that he is just trying to pump up the stocks he owns. On the other side, since he owns none of them you might say that he isn’t willing to put his money where his mouth is. So either way, anyone who gives stock picks can be in the line of fire for criticism.
Most importantly though, you should know to always look for that type of disclaimer at the bottom of every stock market article you read. On TV and radio you will sometimes similarily hear a stock analyst state whether he (or she) owns any of the stocks they are talking about. It is important to know whether they have a financial position in the stocks they are recommending.
You might wonder whether it is best for an analyst to own the stocks they are recommending or whether not owning any of them is okay. After all, anybody can come on the air and make predictions all day if they don’t matter. If a stock picker recommends Nokia and then it goes down 50% from the time they make the recommendation, who cares right? After all, they personally didn’t lose any money.
The bottom line is that free stock picks are a dime a dozen. You know the saying “you get what you pay for” and with stock picks the same is true. Some will work out and some won’t. The best you can really hope to do is to track different stock analysts and see who you grow to trust. There is no doubt that some are better than others and you might find one that works out better than the rest.