How does a beginner investor seek and evaluate markets and companies worth investing in?

I'm a beginning investor. I'm struggling in learning how to research markets and companies to invest in. What are key indicators to look for and use as a guide? How do I find companies that offer dividends on stocks?

Investing, Stocks
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August 2017

Believe it or not, the “For Dummies” series actually offers two pretty good resources for brand new investors: "Investing For Dummies" and "Stock Investing For Dummies." Both are accessible to new comers, extremely readable, and provide a decent foundation of knowledge. In fact, I even recommend that folks who want to hire a professional to do their investing for them read these books if they have no other base of knowledge, just so they have some common points of reference.  

If you burn through those and are yearning for more, I would recommend Benjamin Graham’s "Intelligent Investor." This book is not necessarily advanced, but it is certainly not as readable as the For Dummies books. It spells out some important concepts about the nature of investing, as well as time tested pointers about choosing investments.

If you want to begin to apply your newfound knowledge by utilizing some tools of the trade, most of the online brokerage houses now provide some really neat research functions. This is true even if you’re starting out with a small account size.

Many of the included research tools provided by online brokers now allow retail investors to perform multiple filters to scan through thousands of securities and strain out the few that meet a stated criteria. But first, of course, you have to at least know what you’re filtering for, which is where the previously mentioned resources might come in handy.

I will go ahead and throw in the typical warning, though, that investing in theory and in practice can sometimes be two very different animals, especially at the start. So, if you’re truly just starting out, I would recommend that you take it slow at first, and, if you’re fortunate enough to have some early successes, don’t let it go to your head. One of the best teachers is experience, so it’s valuable to get hands on. However, the cost of tuition for experiential education in investing can sometimes be inordinately high.

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