3 Simple Ways to Find a Winning Stock

A new investor starting out may lack investing ideas. They might feel that they do not possess the business know-how to identify a good company. But that isn’t necessarily true. What we can do is to start increasing our awareness of the products around us to find our investing ideas. And with careful observation, we may know more about businesses than we think.

Here are some areas you can start with:

What do you work with?

Your workplace could be the first starting point to discover investing ideas. If you work in a bank, you might already have knowledge about your bank’s services and how it compares to its competitors. But don’t stop there. Looking further, you might notice that software provided by Silverlake Axis Ltd (SGX: 5CP) is widely used in the banking industry. You can read more about Silverlake Axis here and here.

What’s in a hobby?

Your hobbies can be another springboard to your next investing idea. If you are a budding home chef, you can look at the brands of the utensils you use, or where you get your food ingredients from. You may also have noticed that organic food ingredients are gaining in popularity. All this could lead you to a company like Dairy Farm International Holdings Ltd (SGX: D01) which is the owner of supermarkets such as Jason’s Supermarket and Cold Storage. Find out more about Dairy Farm here.

My favorite things

As a consumer, you will likely have your own favorite products. Take a look at the things which you use constantly everyday, or are passionate about. Your favorite things could range from your favorite brand of toothbrush to your favorite cup of tea at TWG Tea. In turn, this could lead you to find out that TWG Tea is owned by health product provider OSIM International Ltd. (SGX: O23). You can read more about OSIM here.

Foolish summary

If you can start with the products or services which you are most familiar with, you can start to build your knowledge on the companies around it. Finding the next winning stock does not have to involve mastering the most difficult investing idea out there. After all, the best returns in investing do not necessarily come from difficult investment ideas. Instead, by starting to study the products that we use every day, the effort may turn out to be the start of a long investing journey ahead.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.