What Stocks Are People Buying Today

When I first started stock market investing, the first thing I wondered was what stocks are people buying today? Most of us have no clue what stocks to add to our portfolio. If you are looking for a place to start, you need to look for stocks that have strong earnings and sales. These two factors provide a strong fundamental basis to add them to your stock watch list. These are typically going to be growth stocks. Buying stocks in today's economy is a challenge, but there are still opportunities.

The first step is to develop your strategy. I personally have adopted the CANSLIM methodology. I prefer this method to selecting stocks to buy over any other strategy because it makes sense. The market is based on supply and demand. The biggest buyers in the stock market today are not the small investors like you and I, they are the institutional investors that manage hundreds of millions of dollars. Once they start buying stocks with strong fundamentals, they can't hide they're buying. The stock price goes up because the make the demand increase for that stock.

When they do that, you want to be in a position to ride the stock up with them as they carry it higher. And, when they start to bail, you've got to get out right away. Why, because once demand dries up and they move onto another stock, that price is going to fall no matter how good a company you, the financial gurus, the media or your neighbors think it is. It's the law of supply and demand. Plain and simple.

What's the next step after you have identified a company with strong sales and earnings? You start analyzing it's price and volume action. When a stock's price goes up on higher volume than the previous day, that's an indication of buying. When it goes down in price on higher volume than the previous day, that indicates selling. When you start seeing strong selling, you've got to start considering locking in gains. Why buy and hold a stock that might never see institutional sponsorship again? Lock in your stock gains when you have them.

Identifying these buy and sell points is the hardest part of the process. Using stock charts will help and so will looking at past market winners that William O'Neil has laid out in his book How To Make Money In Stocks. Combine his strategy with actual market experience and you'll be identifying stocks to buy today like a pro.