Investing in stocks in 2022 and beyond requires an effective and easy-to-follow routine, backed by rules for when to buy, sell and hold. Investors need guidelines to keep in perspective the moves in top stocks to watch like Amazon.com (AMZN), Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOGL), Microsoft (MSFT) and Apple (AAPL).
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Based on over 130 years of market history, the routine below walks investors through three basic steps to help you grow and protect your money. And you’ll find the tools and stock lists you need to quickly and confidently follow those steps.
Having a sound investing routine based sound rules and stock ratings, will help you successfully navigate the stock market in the year ahead.
Find And Track The Best Stocks To Buy And Watch
This three-step process also helps you track and handle strong market uptrends, as well as periods of stock market volatility and sector rotation, During good times and bad, growth stocks, tech stocks, retailers and industrials will come in and out of favor on Wall Street.
One key to gauging strength in the stock market indexes and individual stocks is to see how they behave around their 50-day and 10-week moving averages. Are they finding support or hitting resistance?
While checking the general stock market trends, be sure to track chart patterns in individual stocks as part of this routine. This helps you identify potential buy points and buy zones for breakout stocks. Watching such technical action also helps you avoid getting swayed by any hype or hysteria in the headlines and stay focused on what the stock market indexes and leading growth stocks are actually doing.
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Keep in mind that the stock market direction can change quickly — for better or worse. And there will be times when certain sectors, such as tech stocks, perform poorly, while others, such as oil and energy stocks, show strength.
Take a minute to watch the video and go through the routine and a buying checklist and selling checklist to see how the tools work together, and how they can help you become an even more successful investor. You can also use the IBD Stock Screener to zero in on stocks to buy and watch that fit your own criteria.
Study Stock Charts Of The Best Growth Stocks — Past And Present
Nvidia, Microsoft, Apple stock and the FANG stocks — Meta Platforms (FB) (formerly known as Facebook), Amazon, Netflix (NFLX) and GOOGL stock — are just a few examples of stocks that have shown exceptional performance across several market cycles.
To study these winners, take a look at the daily, weekly and monthly charts for GOOGL stock, Amazon, Tesla, Nvidia, Apple and other top growth stocks. (If you’re new to technical analysis, see our three-part series on how to read stock charts.)
And if you’re looking for the best long-term investments that have weathered several volatile periods, see which stocks make the cut for IBD Long-Term Leaders. You’ll find names like Microsoft, Alphabet, Pool (POOL) and ServiceNow (NOW).
To get started, see our coverage of current stock market trends and case studies of growth stock with Investor’s Corner.
How To Invest: 3-Step Investing Routine
1. Check Current Market Trends With The Big Picture And Market Pulse
Under the ‘Market Trend’ tab on Investors.com, go to: The Big Picture
The first step is to know what kind of market we’re in right now. Is it time to buy stocks, or is it time to play defense and protect your profits?
Find out by checking the Market Pulse inside The Big Picture to see which of three possible stages the stock market is in right now.
 | CONFIRMED UPTREND • Best time to buy stocks |  | |
 | UPTREND UNDER PRESSURE • Proceed with caution • Be ready to take defensive action | ||
 | MARKET IN CORRECTION • Avoid making new buys • Protect profits and cut losses short • Build watchlist for next uptrend |
Also see: Stock Market Today (updated multiple times throughout each trading session)
2. Find The Best Stocks To Buy And Watch With IBD Stock Lists
Under the ‘Stock Lists’ tab on Investors.com, go to: Stock Lists
The best performing stocks typically display seven common traits in the early stages of their big moves.
Using IBD SmartSelect Ratings and S&P 500-beating stock lists like the IBD 50 and Sector Leaders, you can quickly identify which stocks are most strongly showing those same characteristics right now. You can also use IBD Stock Screener to find stocks that fit your own custom criteria.
Which Top-Rated Stocks Are In Or Near A Buy Zone Right Now?
Simply scroll through IBD screens to find highlights of top-rated stocks in or near a potential buy range. It’s a simple, effective and fast way to build your watchlist.
3. Evaluate Your Stocks And Plan Your Trades With Stock Checkup And IBD Charts
Under the ‘Research’ tab on Investors.com, go to: IBD Stock Checkup | IBD Charts
What’s the most effective way to maximize your profits and minimize risk? Always check both the company’s “fundamentals” (e.g., sales, earnings, products, industry trends) and “technicals” (e.g., price and volume action, support and resistance in the chart).
That combination gives you a major advantage over investors who only look at one or the other.
Does Your Stock Pass Or Fail?
Stock Checkup gives you pass, neutral or fail ratings for the most important stock-picking criteria. Just enter the ticker for an instant diagnosis of your stock. (See how to instantly diagnose your stocks.)
Time To Buy, Sell Or Hold?
Additionally, before you buy a stock use IBD Charts to make sure it’s in a proper buying zone. And use charts to see the right time to take your profits and minimize risk.
Also see: Free investing lessons on How To Buy Stocks | When To Sell Stocks | How To Read Stock Charts
How To Invest: Find The Best Stocks To Buy Before They Break Out
IBD stock lists help you speed up your research. You’ll also find alerts to stocks in or near a potential buy zone in the chart analysis provided for each name on IBD Sector Leaders, IBD 50, IBD Big Cap 20, IPO Leaders and Stock Spotlight.
Regularly monitor these stock lists and indexes using a buying checklist and selling checklist as part of your investing routine. Also, be sure to also check the IBD Breakout Stocks Index, updated weekly.
Checking these screens regularly is a proven way to help improve your investing results by quickly building a high-quality, actionable watchlist. Using this simple three-step routine will also help protect your profits and keep any losses small in weak markets.
Case Study: NVDA Stock
Understanding how to invest in stocks starts with understanding stock market history. This historical look at NVDA stock offers several valuable clues.
As you can see in the graphic below, in March 2016, self-driving car technology leader Nvidia showed how using this routine helps you identify the best to stocks to buy and watch.
Step 1: The Market Pulse showed the current outlook was “Confirmed uptrend” — the best time to buy quality growth stocks.
Step 2: By scanning the IBD 50 list of top growth stocks, you would have seen Nvidia highlighted, with analysis that showed it was near a potential buy point.
Step 3: You could have added Nvidia to your watchlist and learned more about the company using IBD Stock Checkup.
Two weeks later, Nvidia broke out, launching a gain of 750% in just 29 months. Note that the IBD 50 continued to highlight new buying opportunities in Nvidia as it made its big run. It launched subsequent breakouts until entering a steeper correction in the bear market at the end of 2018.
Showing resilience, NVDA stock has bounced back from that retreat and survived the coronavirus crash in 2020. Nvidia resumed its climb and was again hitting new highs prior. Nvidia has now pulled back to test support at its 10-week line as it tries to continue its run into the New Year.
It’s a good reminder of how the strongest stocks form bases, regroup and continue their climbs when market trends are favorable and can struggle when the tide turns.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
How To Invest In Stocks: Tips & Tools
Find The Best Stocks To Buy And Watch With IBD Stock Screener
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Use Checklists To Improve Your Results: Buying Checklist | Selling Checklist
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See IBD Stock Lists & Get Pass/Fail Ratings For All Your Stocks With IBD Digital
Source: https://www.investors.com/how-to-invest/investors-corner/investing-in-stocks-start-with-stock-market-investing-routine-routine/?src=A00220&yptr=yahoo