How much time should I spend researching stocks?

  • Asked By
  • Updated On:
    22-Sep-2021
  • Replies:
    1

Short Answer

Stock researching is a not a lengthy process but beginners can easily take up anywhere between 2 to 4 hours to complete the entire process. The task can be performed faster with the help of any stock screening and fundamental analysis platforms.

Detailed Answer

Why is it important to research stocks?

Researching doesn't only mean reading about the founders and the business model of a company. It includes all the internal and external factors such as financial statements, the company’s performance against the industry and compared to its peers, and many other things. I am sure you devote hours researching new gadgets (for example a mobile phone) before purchasing it, hence why not do some digging when you are about to purchase a part in a company.

How much time should you spend on the research?

The time you require to spend researching stocks is pretty subjective and depends from person to person. Although with the availability of advanced screening and fundamental analysis tools and platforms, the job is considerably easier. You can easily acquire all the data related to a company with a few clicks and taps on your computer. But the main part doesn't start here.

In order to begin the process, you have to first find out the sector and industry in which you want to invest. Once you find it out, the following steps become much easier. To find out the potential industry you can use the “Top-down Method” of analysis, where you start with the economy and narrow down your list to an individual or a couple of stocks of a potential industry.

Let’s understand this with an example, Let's say, you have a positive outlook on the Pharma Industry. In order to find the best stock from the industry, you can carry out a couple of things. To begin with, you have to analyze the economy as a whole for the pharma space to see whether it's in a growth phase or not. Next, you can move directly to the specific sector (Pharma sector, in this case) and try to narrow down your search to a further niche category. To find out these data points you might have to go through some business articles and analyst's forecasts. This should not take more than a couple of hours if you are not doing it for the first time. Beginners might take up another hour or more to undertake the same process.

In the same way, the stock-picking process is relatively simple as you can use any Fundamental analysis platform like Screener. In, or TickerTape to acquire all the required financial data on the stock. The overall process could take up around two to four hours depending on your research abilities and the depth you want to venture into. After your thorough research, you will be left with a handful of high-quality stocks of your favorite industry in which you can safely invest your money.

What are the alternate options?

Now that you know the actual process and the time required to undertake the task if you still think to save some time. You can easily invest in Mutual Funds, where you don’t have to carry out all the research and stock picking. A dedicated fund manager is appointed to do your job. Likewise, you can invest in Index Funds or Index ETFs which track the whole Nifty50 or Sensex and provide returns according. By using these, you can save the time which would be used for analyzing stocks.

Tagged With: stock marketfundamental analysistechnical analysisstock tradingequity investingstock screening
Categories: Stock Trading
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (0)
Related FAQs
Is HDFC Sky app good?

HDFC Sky is a new trading platform launched by HDFC. It has ample features for the investors and participants can engage in seamless trading with it.

Is it possible to make Rs.50,000 in profit with your investment?

Making profits off the stock market is easier said than done. However, if you want to make 50,000 rupees as profits, you would have to consider intraday and F&O options in trading. But then factors such as stock selection, investment amount do play a significant role in the profits your reap.

What are Basic Necessities to Trade in Stock Market Hassle Free?

Learn the basic necessities to trade in stock market in India. Easy stock trading tips for a hassle free experience as a trader or an investor. All you require is an internet connection, laptop or smartphone, active bank account, demat and trading account and there you do, trading in the stock market is simple as booking the movie tickets online.

For long-term investments, which channels are viable for significant returns given the current market scenario?

For significant returns, one can look forward towards stock funds, real estate investments, dividend stocks, target-date funds and so on. Each one of these investments does offer something better to investors based on their capital of investments made.

What is the minimum amount I need to start stock trading in India?

A common question that a newbie trader wishes to ask, what is the minimum amount I need to start stock trading in India? A query whose answer we probably look for to initiate our stock investment journey.

Which is the best stock broker for beginners in India?

Discount brokers have gained a lot of popularity in the past couple of years. Zerodha is currently India's largest and most trusted discount broker which is also the best option for beginners. It has all the necessary qualities required for a good broker like low commissions, low-maintenance charges, high-quality trading terminal, etc.

What are best stocks for college students to invest in India?

The best stocks for college students to invest in in India are those with strong fundamentals and high dividend yields, such as Reliance Ltd., ITC Ltd., and Infosys Ltd.

What is Paytm Money? Investment & Trading Platform

Paytm has added its name to the stockbroking industry all through its new platforms “Paytm Money.” The platform was rolled out to customers earlier in September 2020 and had since then exploded amongst traders/investors to see the offerings set up by the company.

How do stock brokers make money?

Stock Market is always at risk and involves around a lot of aspects. A daily news viewer also needs time to understand what is exactly going on. To actually dive into the world of stocks, it is important to read about the companies and their strategies and that is what stockbrokers do. They understand the company, do their research and expect the price of stocks by studying the company's ways of dealing with stock market strategies and also about the market forces. Let us now go through the actual topic and understand things better.

What are benefits of opening Demat & Trading account with 5paisa?

5paisa happens to be the second largest stock broker in the country that offers plenty of benefits and features through its Demat and trading account. Some of which include low brokerage charges of 20 rupees, paperless account opening, free trading tools, research and trading advice for free, and much more.