hr: Money

The stock market can be a great way to make money. Unfortunately as many beginner investors find out it can also be a very quick way to lose money. If you want to make sure you are one of the winners you need to know why some people make money and why others lose.

The main ingredient to winning on the stock market is research. The large investment banks such as Goldman Sachs invest millions of dollars each year in their research divisions. Historically they would pay large armies of research analysts to scour the markets in order to find companies that are undervalued and expected to rise in price.

In more recent times however the large investment houses have changed their strategy somewhat. Rather than relying on manual research they invest more and more in software. This allows them to research thousands instead of hundreds of stocks. Once they have written a computer program they can rerun the same analysis many times an hour meaning that the traders can react and profit from any changing opportunities as they happen.

Until recently such computer software has been only affordable and accessible to professional traders working for investment banks with big budgets. However now individual private investors can get access to the same information for a fraction of the cost. The way that this is possible is thanks to some ex bankers creating their own software then selling subscriptions to the results it outputs.

Photo Credit: Tony the Misfit

What this means is that you can get access to the same stock picks that the professionals will have access to. This is a major development that means that finally individual investors can get access to the same information as the professionals.