| New traders and investors often want to know what | | | | your attention on include the Chairman's report, the |
| the hot shares to buy are. This question involves a | | | | Director's report, and the company financial |
| more in-depth answer, you want to know how to | | | | statement. Annual company financial reports are |
| determine the hot shares rather than just have | | | | generally made available to the public on the |
| someone tell you that a certain stock is hot right | | | | company's website for those non-shareholders who |
| now. Without knowing why the stock is hot you | | | | would like a report. |
| really are learning nothing and are just taking | | | | • How does a prospective hot stock compare |
| someone else's word at face value that may or may | | | | to its competitors? |
| not be founded on sound factual information. Let's | | | | Every company listed on the ASX share market, or |
| take a look at how to determine on your own if a | | | | any other stock exchange is grouped into what are |
| given stock is hot or not. | | | | known as industry sectors. Here you will find other |
| • What is the catalyst for growth within the | | | | similarly related companies that are generally |
| company? | | | | competitors to the company you are researching. By |
| This is an important question to ask before buying | | | | comparing the financial positions and factors |
| shares in any company. You need to know what | | | | contributing to continued growth of other companies |
| their main growth factor is moving forward, that is, | | | | to the company you are researching, you can |
| what products or services are they currently | | | | determine whether or not a prospective hot stock to |
| producing or perhaps have on the drawing boards | | | | buy is keeping pace with its sector and its |
| that will contribute to consistent longer-term growth? | | | | competitors. |
| A good way to find out about new company | | | | • Don't invest blindly |
| products is simply to go to their main corporate | | | | Never take anyone's hot shares tips at face value. It |
| website and read about their plans to maintain and | | | | is fine to get shares advice from people you know |
| drive growth within the company. If you can't really | | | | or your stock broker, or even people you don't |
| find much information that seems like it would | | | | know that well. But don't ever blindly buy shares of a |
| contribute to expansion of the company's profits, | | | | company JUST because someone told you the stock |
| than you may want to put this stock in the "not" | | | | is really hot. Take all shares recommendations with a |
| category instead of the hot shares to buy category. | | | | grain of salt and do your own research before you |
| • Check the annual report | | | | invest. Many stock brokers have a financial |
| There is a plethora of relevant and important | | | | self-interest to get you to trade more; this might |
| information regarding every company listed on the | | | | lead them to make less than honest stock |
| major world stock exchanges located in their annual | | | | recommendations just to collect a commission. |
| company report. Annual reports are in-depth | | | | Similarly, many hot stock tips come from other |
| documents that describe the details of the | | | | self-serving sources that might be less than |
| company's activities over the past year, as well as its | | | | concerned with your financial well being. Do your own |
| plans for the future. Some of the more important | | | | research and get familiar with any company before |
| aspects of an annual report you will want to focus | | | | deciding they have hot shares to buy. |