1. Profits

The first rule is that the company that you are interested in investing in should be experiencing sizeable profits. Better yet find out is their profit to debt ration favorable and you should be hard pressed to find one of those companies without debt but that doesn’t mean that you should not be choosy. In this case, the least amount of debt with the most returns will prove to be a sound and better investment. Another thing to watch out for is how progressive the debt payoffs are. This is a sign of good or bad financial management.

2. Industry Trends in 2009

This method is the one which almost all people use anyway so if there is a high demand for oil then people instinctively want to buy oil stocks where the only problem with this kind of analysis; then, is that really isn’t forward looking analysis. This is just waiting and seeing that doesn’t get you in on the ground floor of and investment before the public actually takes notice. Investing much ahead of an industry trend is better. So watch out for stocks in industries that have more advantages and in demand.

3. Personal Interest

There’s a saying that you do well at things that you enjoy to do and this makes for perfect logical sense; that works for stocks as well. If you invest in something, which actually interests you and in those circumstances, you will generally be more studious and make more of an effort to choose the best stocks. That can be a very boring researching since the stocks that don’t interest you, you would be still looking at it and you are most likely not to be as thorough as you should be.

4. Tenure

Ask the most basic question – just, how long the company has been in business? This is not to say that investing in fresh-off-the-block companies is a bad idea but it’s more likely to make for safer investing in a more established company with some kind of track records.