I'll basically highlight the desireable things in a stock...
a low P/E (see last post) - this means good returns on investment
high dividends - this means that even in a falling market these stocks will be falling less generally as no-one likes to lose a big fat dividend source. So both ways its win win.
Another is look for a low PEG as then it means that the P/E is low and the gains are high.
As for market cap...well I still don't really have much of a clue as to its effects. drop a line if you know.
Now other factors, look for a company with low debts, look for a blue chip firm - these don't generally go bust....
look for a company with prices that have fallen recently...but ofcourse this may mean they might fall further, but look at their actual value (Another post I think for that (seems kinda scary at first glance)) and if its lower than that, then the market will correct itself, but ofcourse if its higher, then don't be swayed by the emotions and actions of others, rather just sell straight away.
okay, part 3 of the guide is here.
My new trading book that takes you through money-making step-by-step:
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