How do you know which stocks to invest in? There are literally hundreds of thousands of stocks out there available on the stock market, just waiting for you to buy shares in them, with the promise of making you money if you hold onto their stock long enough.
Unless you have a particularly strong disposition to one particular industry, you might it find it next to impossible to find the perfect stock to invest in. How do you know which stock will earn you money? How do you know which stock will lose you money? It almost seems like gambling to invest in stocks, doesn't it?
You may have heard many stock analysts exhort you to "do your homework". Check a company's P/E (price to earnings) ratios and read their financial reports.
But even if you do that, you can still lose money, because you don't really know the nitty gritty details of the company's health and you certainly don't have the bigger picture of the company's overall performance since it first started trading publicly on the market.
Now, imagine having to do your "homework" for dozens and dozens of stocks, to find the one that is right for you. Even if you find one that you like, what if the price per share is too high? If you only have a limited budget with which to invest, and each share is too expensive, what is the point of investing if you can only buy one or two shares of a stock?
Perhaps the answer lies in the use of computers. There are computer programs out there that are programmed to analyze hundreds of thousands of stocks on the market and analyze them for their past performance, their daily trading volume, their highs and lows, their splits, and many other dimensions of data. Based on their analysis, they are able to perform millions of computations per second and identify which stocks have the highest statistical probability of surging in value in the upcoming time horizon.
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