Bargain Stocks to Buy

If you are looking for bargain stocks to buy, please remember the phrase “Caveat Emptor”, or “Buyer Beware”, before parting with your hard-earned money. So many investors seek the latest “hot tip” or list of popular stocks from all the usual suspects (CNBC, MSN Money, etc.), without doing one second of their own independent research about the stock. Folks, nobody cares more about your money than you do. I highly encourage any investor out there to do their own homework on a stock before they just jump right in and blindly invest based on someone else’s recommendation. As far as specific stocks to buy, there are literally thousands of opportunities out there for you to choose from, but before you invest, you have to determine what your objectives are. For instance, are you trading in a quick-in, quick-out manner just for short-term capital gains, or are you more along the lines of a WarrenBuffet-type of investor that’s looking for long-term value and returns over the long haul? You have to determine your own investment style before launching into the next “hot stock”. When you’re looking for bargains in the stock market, it would do you good to abide by the principle that WarrenBuffet once explained…basically, you shop for stocks the same way you shop for groceries: When something’s on sale, you get more of it. The real trick of the stock market, however, is trying to determine if a stock is indeed “on sale”. I also remember a phrase from SirJohnTempleton, when he said you have to learn how to “become greedy when others are fearful, and fearful when others are greedy”. This doesn’t mean that you become a contrarian just for the sake of contrarianism, but it does mean that you keep you mind on guard from falling into any type of “herd mentality” where investing in stocks is concerned.

As far as actual stocks on the bargain counter, in my mind there’s no better way to determine whether or not a stock is indeed “for sale” than by looking at the stock’s price chart. You can find out a lot about the type of price range the stock is trading in, and whether or not the price of the stock is reasonably within the 52-week high and low price range that the stock has been trading in. One point to mention: Just because a stock is trading at very close to its 52-week low doesn’t mean that it’s automatically a bargain; you have to really determine if it’s in a period of accumulation, or if it’s really just withering away and on a slippery slope downward. Another thing to check is the average daily volume. If you see lots of unusual spikes and dips in volume instead of a steady amount of shares being traded daily, this shows you that there is some kind of imbalance as far as the demand for the stock is concerned. If you see a continually declining price, but steadily increasing heavy volume, it could be the sign of a major selloff…it’s not a good idea to try and go long during this period. The stock’s price will need to recover and go through a period of accumulation before it can really present itself as being “on the bargain counter” again. The best time to enter into a stock (in my opinion) is when the price is trading in a tight range (relative to the stock’s price), no more than 5% swings either way on an average trading day, on quiet volume. On a price chart, it looks like a sideways channel, just snaking along with no type of fanfare. These types of chart formations are almost always buildups for an upward move in price in the near future. Again, as far as specific stocks go, there’s no way on Planet Earth I would have enough time to give a list of all the stocks that fit this criteria, but suffice it to say, tons of research and studying price charts is required to determine the specific bargain stocks to buy in a given market. If I wasn’t so sleepy, I would give some examples, but I’m going to have to close this hub out so I can go to bed.