When you're brand new to investing, it can be a struggle to wrap your head around all the different terminology and jargon. But one way to simplify your investment approach is a method made fashionable by Peter Lynch, author of 'One Up On Wall Street' -- buying what you know.
You probably have a lot more insider knowledge than you think. It may not be the be-all, end-all, but there's a lot we can learn from the products and services we use every day.
All of us already have our favorites. That might be your preference to buy an iPhone over Android, all of your must-have subscriptions like the Netflix and Spotifys of the world, who you bank and make payments with, or the social media platforms you can't get enough of!
It doesn't just apply to your personal spending habits either -- think about your work life. There are probably multiple applications that you use every day to fulfill your role or keep your business running -- think about the Microsoft suite of products, the communication angle for services like Gmail, Outlook, and Slack, and even enterprise tools like Salesforce and Amazon Web Services (AWS), that keep operations going round the clock.
Now, this process certainly isn't fool-proof. Just because you use a product all the time doesn't mean it necessarily translates to a good investment. But what it does do is turn on that curiosity switch to spot potential trends and ideas to investigate further when investing.
From there, we can use free tools like Yahoo Finance to see if the company is publicly listed on the markets. If it is, there's the opportunity to start digging a little deeper to see if your idea might warrant an investment.
Want to hear more? Enjoy a free snippet of our Fundamentals of StockPicking course by playing this video.
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