Page 507 - How to Make Money in Stocks Trilogy

376 INVESTING LIKE A PROFESSIONAL

Composite Rating As we discussed earlier, the composite rating is a quick way to
know whether you should move ahead or not. With the color-coded icons
within the “IBD Stock Checklist” (see page 375), it’s like a traffic light that
tells you whether to go (green), slow down (yellow), or stop (red) in your
research, and it will guide you toward only the very best companies.

Performance Within Group—Buy the Best Stocks in the Top Groups In the “Performance Within
Group” section, you can see how the stock specifically performs against the
rest of the stocks in its industry group. The rankings are based on IBD
SmartSelect ratings. This will help you determine if you’re making the right
choices. It’s easy to be swayed by news or TV tips, but this should give you a
major edge by forcing you to stick to the facts.

Group Leaders—Pointing You Toward Real Potential Leadership No matter what you’ve bought or
are thinking about buying, this screen shows you where the real leadership
is. These are the stocks exhibiting the type of performance that might
propel them further in an uptrending general market. You can click on each
of the SmartSelect ratings to see which stocks in the group rank highest for
that individual rating.

“IBD Stock Checklist” Is Your Stock Pass, Neutral, or Fail? The “IBD Stock Checklist” gives
you a thorough review of the fundamental and technical strength of each
stock, along with a pass, neutral, or fail grade for each category. For
example, at the very top of the stock checklist, you’ll see a green, yellow, or
red icon next to the composite rating. This will help steer you toward the
true market leaders—and away from the laggards.
In the “General Market and Industry Group” section, you’ll also get a
pass, neutral, or fail grade for the general market and for the relevant indus-
try group. Do not buy stocks when the general market flashes a red signal.

IBD Charts Show You the Right Time to Buy or Sell You never want to buy any highly rated
stock in IBD’s tables without first checking a chart, and it pays to regularly
review both daily and weekly charts on any stocks you own. This is a vital
step that will help you spot emerging trends and track a stock’s movement
so you know the exact time to buy or sell. IBD charts are designed to make
it easier and faster for both new and experienced chart readers to get the
real picture. You can obtain these daily and weekly charts that are free on
Investors.com.
For those who are intimidated by charts, think of a stock chart as a “pic-
ture worth a thousand words.” It will tell you some vital things about the
progress (or lack of progress) of any company. In time, you will find your