Why do you need to start creating your stock watchlist today?
Have you ever been to a supermarket without any shopping list of the groceries that you want to buy?
If yes, then you can relate to the two most likely possible outcomes in such scenarios:
- You might miss few things that you wanted to purchase.
- Else, you might purchase few/many unnecessary products which you never intended to buy.
Both these scenarios are not favorable for a buyer.
For example, suppose there was a great discount on the products when you visited the supermarket. However, as you were not ready with the list, you missed a great opportunity to purchase many things that you wanted. Further, you don’t know when the same opportunity will return.
On the other hand, for the second scenario where you bought unnecessary products, then again its a waste of money. You could have invested that amount in something useful or could have bought something that you really wanted.
Overall, purchasing unnecessary products is not a good idea. As Warren Buffett used to say-
“If you buy things you do not need, soon you will have to sell things you need.”
The stock market is not very different from the supermarket. And similar to your groceries list, you need to make a stock list, if you don’t want to end up buying garbage stocks which you never intended to buy in the first place.
What is a stock watchlist?
A stock watchlist is a list of stocks which you have already studied (i.e. researched) and planning to invest in those stocks if a good opportunity arrives in future.
These are those stocks which you will buy if their market price falls within your purchase price range.
Why do you need to start creating your stock watchlist today?
Here are three best reasons why you need to start creating your stock watchlist today-
1. A stock watchlist will help you to avoid impulse buying:
Many times, you might see the market down or few stocks trading at a very cheap price. Here, most people will purchase stocks on impulse because they do not want to miss the opportunity. And because of this impulse buying, they end up with fundamentally weak stocks (most of the times) as they never got the time to study the stock properly. Having a stock watchlist can help you avoid impulse buying.
2. It will help you seize the opportunity when it presents:
If you already have a list of few amazing stocks that you are planning to buy and you found the stock prices within your purchase range in future, then you can seize the opportunity.
As you have researched that stock previously, all you needed was an opportunity. Remember, success occurs when opportunity meets preparation.
3. It can help you plan your future purchases:
There may come few situations when you won’t have enough cash/savings to purchase the stocks at that moment. In such case, you can keep those stocks in your watchlist so that you can buy them in future if a similar opportunity arrives.
Having a stock watchlist helps a lot in the scenarios like market fall or correction. In these scenarios, most people get confused what to purchase and what not to?
- A quarter of the investing population is confused what to buy because they find most of the stocks at a discount price and ends up buying a number of not-so-good stocks.
- Remaining are scared and starts researching the stocks from scratch. Generally, it takes a lot of time and hence, they miss this buying opportunity.
However, if you already have a watchlist of amazing stocks, then you can seize the best deals.
How to create your stock watchlist?
First of all, the best stocks to purchase are the ones that are in your portfolio.
You already have researched those companies and hence know you a lot regarding those stocks. You would have a good knowledge of the company’s product, competitive advantage, management, past-performance etc.
However, you do not always need to stick to only those stocks. Its always good to have a list of better stocks in your watchlist. Besides, if you are willing to dedicate some time and efforts, you can always create an amazing watchlist on your own.
For beginners, I would recommend using excel sheets to create a stock watchlist. Here, you can create separate sheets of the stocks that you’re studying, stocks that you already studied & found attractive and lastly, the ones that you’re planning to research/study in future. This way, you can keep a separate track of stocks without much nuisance.
Anyways, you are always welcome to create your own strategy on how you’ll build your stock watchlist.
Many people prefer keeping the stocks details on their phone while there are few who still use the traditional way of writing the names of stock in their dairy.
I do not want to comment which way is best as it totally depends on personal preference. However, I thought it’s worth highlighting few simple ways to start creating your stock watchlist.
In addition, there are few free sources where you can create your stock watchlist –
- Google sheet (My favorite)
- Financial websites like Investing.com, Moneycontrol website, MarketWatch etc
- Financial apps like Money Control app, ET market etc
- Excel (simplest)
If you want to consistently make money from the stock market, you need to create your strategy and moreover stick to it. Avoiding impulse buying can be one such great strategy to not lose money in stocks.
Having a stock watchlist can help you a lot to avoid impulse purchases of stocks. Moreover, it would be even better, if you make a rule to purchase only those stocks that are either in your stock watchlist or already in your portfolio.
This will also help you to avoid sudden stock purchases based on tips/recommendations from friends/brokers/magazines or whatever the source.
If you are new to stocks and want to learn stock market investing from scratch, here’s an amazing online course: ‘HOW TO PICK WINNING STOCKS?‘ The course is currently available at a discount.
Tags: stocks, start Creating Your Stock Watchlist, stock watchlist
Hi, I am Kritesh (Tweet me here), an NSE Certified Equity Fundamental Analyst and an electrical engineer (NIT Warangal) by qualification. I have a passion for stocks and have spent my last 4+ years learning, investing and educating people about stock market investing. And so, I am delighted to share my learnings with you. #HappyInvesting