Hot Shares To Buy

When new traders and investors are looking to enter the market, often the first question to come to of their mouth is ‘what are the hot shares to buy’?
It’s a perfectly legitimate question at the time. Obviously the new market participant is excited about their first foray into trading or investing and no doubt they desperately want their first stock to be one that performs well. The problem is, however, that is simply the wrong question to be asking. The correct question that people should be asking is ‘how am I going to be able to identify the hot shares to buy?’

The two questions, although similar, conjure up completely different answers. The question, ‘what are the hot shares to buy?’ is something you ask your best friend down at the local. The simple fact of the matter, however, is that they don’t know any better than you and they have unlikely performed any sound analysis before blurting out their recommendation. The next time someone gives a stock tip for free, ask them what the debt to equity ratio of the company is. If they can answer that, keep listening.

The question ‘how am I going to be able to identify the hot shares to buy?’ is far more involved. It leads one to thinking, maybe I need a plan of attack if I am going to enter the market. Maybe I am going to need to do some research to find out why I am going to buy certain companies and not others. Maybe I need a set of trading and investing rules. Maybe I need some help.

It is well known fact that most people enter the market during bull market phases. This is when the euphoria in the market is running high and people can’t pick up a newspaper or watch the nightly news without hearing about how well the market is performing. It is this fever pitch that draws people into the market.
History has shown us that bull markets do not last forever but, whilst they are in effect, can make trading and investing seem relatively simple. In such a situation, a market participant simply needs to buy stocks, hold them for a period, and sell them when they are higher.
The perceived ease with which the trader or investor is finding success is what can bring about their undoing. Their success will likely encourage them to move away from their rules, taking on board inappropriate risks. The trader’s success will continue, because the odds are heavily stacked in their favour, on the proviso the bull market continues. What happens, however, when the market turns?

And therein lies the rub.

Essentially what we are saying through all of this, is that it is wise for people who are entering the market to do some research and have a plan of attack, if not an outright set of clearly defined rules before they take that first step.
This will help to provide clarity in your trading and investment decision making, rather than the haphazard, scatter-gun approach that most newbies take. It’s an old saying but a good one, ‘if you fail to plan, you plan to fail.

Here at Shares to buy, we have endeavoured to at least point you in the right direction when it comes to formulating your plan.
As well as providing trading strategies and market commentaries, we have also outlined some of the potential shares to buy in each sector of the market, via pages such as our Mining shares to buy, Gold shares to buy, and Oil and gas shares to buy.

Although these are not comprehensive lists, they provide a starting point for research into the companies you might like to invest in.
Although newbies often like to ‘go it alone’, there is a lot to be said for investing in quality research and education, when first entering the market.
Trading and investing, like any skill, requires some education. Just as you wouldn’t expect to perform open heart surgery or stand up defend a murder suspect after reading one book on being a doctor or a lawyer, you shouldn’t expect to be Warren Buffet or George Soros when you first enter the market.
Mastering the markets requires skill and discipline, like any pursuit, but it can be an extremely rewarding process. As mentioned elsewhere around the Shares to buy website, there is nothing quite like a winning trade or watching your investment grow.

As always, we hope this article has provided some insight, happy trading and investing.