Investment Research Made Easy, Much Easy
Posted by Jency Jane on November 17th, 2021
Markets seem beyond comprehension.?But they don’t have to be.?
Investors are urged to be cautious, to make sound decisions. But while equity research was indeed grueling in the past, it’s quite less so today.?
The internet has spawned limitless apps, websites, and other sources of information — most free! —? that makes equity research much easier and accessible.??
In principle, whether you invest in investment research or do it yourself, making sound, evidence-based claims on the course of a company involves less risk today, since all the information you need is probably just a click or tap away.??
In other words, the more you know, the better decisions you make.??
Here’s where to begin.?
1. Knowing the market
First, collect information about the state of the market or the economy.??
Of course, this is harder than it sounds. Much harder, since the scope of the information available out there is seemingly infinite.??
To make it easier, economy or market research should be broken down into smaller parts. In other words, research must be conducted piecemeal. Ultimately, the information can be combined to have a good understanding of the whole.??
The art of market research is imprecise. It will always be since uncertainty is unavoidable. Excellent market research is just keeping that uncertainty as low as possible.??
2. Knowing the business?
Once you have a good assessment of the market, investment research can move forward to assessing the business in consideration.??
Again, the amount of information out there might be overwhelming. So, it would help to break it down. Begin by identifying the factors that may most impact the business’s value.??
Broadly, we can divide the factors into two: external and internal.??
External factors are events that are not in the control of the business. These include sub-factors such as social, political, and cultural changes, a natural disaster, or innovations made by its competitors. These, and other myriad factors, directly or indirectly, affect its value. Get hold of them.?
Internal factors, on the other hand, are events very much in the control of the business. These include sub-factors such as products, services, finance, management practices, sustainability practices, innovations, workplace culture, and other factors that shape the company as a whole. These factors are the difference between a well-oiled machine and an unwieldy assemblage of incompatible parts.??
Which, do you think, would fare better??
3. Knowing the competitors
Next, assess the competitors.??
The factors for assessing a company and its competitors are mostly identical. This is because the objective of competitor analytics is to benchmark the business with its competitors — to figure out its standing or positioning in the market.??
Competitor analysis is a core ingredient of investment research because it helps investors determine the opportunity cost of their investments — the alternate,?what-could\\'ve-been?had they invested in the competitor.??
This awareness of alternatives, the awareness of risks, informs better investment decisions.??
Many experts are very willing to help new investors, thereby expanding their scope of knowledge at nearly no additional cost.?
Remember that networking is the oldest and arguably the most effective way to make decisions. Alone, we make decisions based on very narrow insights. Networking, however, is the connection of smaller brains, experts in different subjects, to form a larger one that offers much broader insights.
Outline everything you have learned into a report such that the insights are easy to track and communicate. To get the most out of your report, make sure the report has actionable outcomes, such that you always make definitive decisions.
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About the AuthorJency Jane
Joined: May 26th, 2020
Articles Posted: 1