Kick The Tires

Before you purchase another car you walk around the lot, boot the tires, sweep the doors and expression at the mileage indicator. That's an odometer. I know. That is about all the "research" you can make other than what the car salesman states you and I trust you cognize better than to believe him.

The same travels for purchasing pillory or common funds. All the brokerage companies state you to make your research before you buy. Kick the tires. Slam the doors. Look at the odometer. But how make you make this and can you really get the true narrative about any equity because you can't take it for a diagnostic test drive and you don't desire to believe any broker. Wall Street desires you to read the prospectus, survey the annual report, happen out about management, learn the P/E ratios, see that their sales and earnings are increasing and on and on and on assemblage statistics until your caput hurts.

OK, now you have got got all that information, but what make you have?

The Annual Report. The statute title ought to give you a clue. Much of the information in it is already a twelvemonth old and much aged depending upon when you are looking at it.

The Prospectus. Did you cognize that this complex written document was not written for you, the investor? It was written for some Dilbert in his cell at the Securities and Exchange Committee in American Capital who surveys it to be certain it rans into all the ordinances for full disclosure, whatever that is. If you read the prospectuses for any stock or common monetary fund that is a existent victor and another where you will lose all your money you will happen they are both almost identical. It is a waste material of clip to read these. They belong in the underside of a birdcage.

Company management. Bash you believe they are going to state you anything bad? Come on.

Shall we maintain on going or are you getting the idea? What you are gathering is information that everyone else can access, some of which can be distorted and will not state you the most of import thing of all. Volition the stock or common monetary fund travel up if I purchase it? Your broker have all this information so don't inquire him as he will regurgitate this messiness and do it sound important. In other words he doesn't cognize either.

When it come ups to purchasing pillory and common finances you cannot make any worthwhile research the manner Wall Street states you. When your stock travels down and you lose money they can look you in the oculus and state you did your research and it is not our fault you lost money. It is their manner to maintain from being sued for bad advice.

Kicking tyres the manner the large male children state you doesn't work. In a future column I will travel into how to happen equities that make travel up and you won't need any of that Wall Street disinformation to happen winners.