How to Monitor the Stock Market to Buy Stocks

Investing in the stock market can be a lucrative and enjoyable way to set aside money for the future. It’s essential that you fully understand the market and the basic principles of investing before you tie up a lot of your money in the market, of course. While most financial advisors will strongly discourage day trading and quick buying and selling of stocks, you may be able to monitor the stock market to buy and sell stock at the best possible time, thereby optimizing your returns.

Stock Market Monitoring Basics

As explained by the experts at NerdWallet and most other financial websites or publications, it’s essential that you buy stocks for the long term. The market will fall while you are investing. There is no way around it. It’s better to go into your investing journey with this knowledge in mind, and avoid quickly selling stocks when their values start to dip. Selling at a loss will, of course, only mean you lose money.

If you are at all unsure of the basics of investing, it’s recommended that you seek the help of a financial services professional to advise you. You do not need to pay someone else to manage your investments, though that is something you can consider. However, you should certainly educate yourself by reading stock market news and guidance, or seek help from a pro before setting money aside.

Working with Brokerages or Advisors

When working with a brokerage, you will want to create an email alert or other automatic trigger to let you know when pricing changes on the stocks you own or are planning to purchase. Unless you aren't doing anything besides trading, you likely won’t have time to monitor stock pricing without some sort of automated system.

U.S. News and World Report says that you should read any quarterly reports that are issued for the stocks or funds you are invested in. These provide important information like who is leading the company and its board of directors, any significant changes or updates and the stock price over time.

If you work with a brokerage that offers financial advisors, you can also choose to outsource this task. Most advisors offer you the opportunity to provide a risk profile and preferences as to which types of stocks you are comfortable investing in. You can authorize these representatives to buy and sell on your behalf, depending on the sort of account you set up.

Finding Appropriate Stock Prices

It’s very easy to find up-to-the-minute stock pricing and breaking market-related news on stock apps and websites. If you’re considering a purchase, you might wish to read recent articles about that stock, as well as a prospectus and information from the company. There are a multitude of resources out there to help investors, both new and experienced, to determine which stocks are a worthy investment.

Before you put any money down, you should consider which values you are comfortable with for which stocks. This is an important strategy to avoid the temptation to buy or sell quickly, rather than invest for the long term. For instance, maybe your research suggests a biotech company is up-and-coming, and its stock is valued at ​$100​ a share. If you feel comfortable purchasing five shares at that price, knowing you might lose ​$500​, it could be a good fit for you. If, however, the price per share is ​$1,000​, you might not be comfortable investing with the knowledge that you could lose so much money in the short term if predictions do not come to pass.

Depending on your investment strategy, you might also wish to consider using limit orders. Investopedia explains that a limit order is when you buy or sell stock for a given price that you set. For instance, you might wish to buy 10 shares of a stock at ​$500​ per share or less. The order can be set at any time, and it will automatically go through when the stock hits that price (or less). If the stock never falls below ​$500​, though, your limit order would never be filled. This is a good strategy for automating the stock-buying process based upon your comfort level with pricing, as determined previously.