Intro: A multi-faceted approach to successful investing

Before getting into my first post, I’d like to say I’m looking forward to what I hope will be an informative and educational running dialogue for investors interested in the CANSLIM (CANSLIM is an acronym describing elements of the investing strategy)approach to investing. While I do run a website for CANSLIM investors, I like the idea of an informal arena for exchanging thoughts with other investors. For more information on this style of investing you can check out the tutorial I have set up on my web site.

When making a decision to buy or sell anything with a high cost what do you do? Well, if you’re a smart shopper, you check out that item thoroughly. For example, buying a house is the largest purchase most people will make. It pays to spend considerable time checking out the merchandise. You’ll probably look at the price of other homes in the area, the quality of schools, location of shopping and recreation, future growth, the quality of the home itself, etc. Making the decision to purchase a stock is no different, however few people take the time necessary to adequately research a stock before spending their hard earned money.

Of course there are many approaches to researching a stock, however an approach that looks at every angle is the most desirable and the CANSLIM method of investing developed by William O’neil does this very well. It’s the reason why it is one of the top investing strategies around. The key to its success is that it uses what I like to call a top – down approach. Looking at the big picture (the economy, interest rates), then the market itself (using volume and price analysis), the industry groups (where in the market the strength lies – there are always pockets of strength) and finally the stock itself (using fundamental and technical analysis). Yes, it can be a labor intensive stock picking strategy, but their are services available (including my own site), that help you invest in the highest quality stocks when the market is strong.

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