How to Invest in Stocks

1. Gather Information. Its needless to say that staying well informed goes a long way in keeping you abreast with the developments in the financial world and helps you pick stocks in a better manner. There are several media sources from where you can gather the latest market buzz. Sites like Yahoo Finance or Business Sections of leading newspapers online should be a good start to get a feel of the market.
2. Get Industry Specific. Choose industries based on market demand and growth. It can be very difficult to predict which sector of the market would be giving good returns 5 years down the line. But as you do your research, certain stock market sectors will keep coming up in the news with lots of potential due to the overall sentiment and their future growth capability.
3. Choose High Growth Stocks. Choose stocks of companies which show quarter on quarter of high growth. This trend is likely to follow if the growth pattern sustains and it is a high probability that the stock would do good. High Growth Stocks are also decoupled from market fluctuations and would do good even while the market is bearish showing clear signs of future growth potential.
4. High Capital Base. Choose stocks of companies with a very large capital base. This ensures that even in lean times the company will be able to payout its share holders. Also, the larger the net assets of the company, the higher would the investment capitalization and higher would be the future growth.
5. High Dividend Payback. Companies which payback high dividend are good candidates for buying stocks. Firstly a high dividend percentage hints at a high profit margin and sustainability of business in the future. Secondly, as an investor you get to make some income every quarter or year depending on the dividend payment schedule.

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