Analyzing Growth Stocks: An Important Focus For Any Investor

Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find. Still, we need to look at the big picture once in a while. Since so much has changed lately, this may be a good time to "take stock". Many have reevaluated their investment strategies. The problem is that many of these reevaluations are moving people away from their goals. As the market has dropped, rather than moving toward buying at the cheaper prices, we've seen people move away from stocks, a strategy which has little long-term benefit.

THE PICTURE

It's all about planning for the future. The first step is to picture the future you have in mind. Most of us already have part of the picture in our sights. We picture ourselves in a home, with food, heat, clothing -- the necessities. Beyond the basics, some of us may picture ourselves raising a family and possibly supporting our kids' education or business ventures or helping them buy their first home. Others may imagine supporting a church or charity, or accomplishing some great humanitarian goal. Most imagine some type of vacation at least once in a lifetime, or a personal goal that we've always wanted to achieve. Regardless of specifics, trying to get as clear a picture of your intentions as possible is an important first step. Once we know where we're going, we can begin mapping our path

THE PLAN

Those who fail to plan, have already planned to fail. It is nearly impossible to reach a goal if there's no strategy in place. Of course, there are a variety of personal decisions and trade-offs involved in any plan, and only a portion of these involve finances. Let's focus here on the financial dimension of the plan, because the financial decisions are often the ones that prevent us from reaching our goals. Financial decisions are never easy, and the issues quite often reach to the core of our being. They involve our deepest values, our choices of what is most important in our lives. If other people are involved in our life, we need to balance our values with those of our families.

Creating the financial plan involves three steps: goal-setting, measurement and implementation.

Goal-setting requires us to determine both the specific achievements we desire and the timing of these achievements. For example, it is not enough to know that we want to own a 1000 square foot home on the beach in Hawaii. We must also identify any time-frames we have in mind. Measurement requires us to evaluate the cost of our goals, and determine our pacing. We must figure out what it will take, then, based upon our timing needs, pace our plan by calculating what the per-year savings must be and the growth rate our saving must achieve to accomplish that goal. Pacing for our goals is the most technical portion of the planning process, and often where people fall down on the job. Inflation in the economy is a complicating factor here too. If we don't take inflation into account, a long-term plan is often doomed. Imagine someone who saved up for 30 years to buy a house, ignoring inflation. She'd have saved up $25,000, and wouldn't be able to afford anything. Her cost calculation must recognize that money loses value over time. Making these calculations can seem intimidating for the inexperienced. We have charts and graphs that we use to assist our clients in making these judgments, but for those who aren't nearby, the American Savings Education Council has some excellent resources on the web that are fairly simple to use.

Once we've gone to the trouble of learning precisely what we need to achieve our goals, its time to begin translating these specifics into an action plan. This is part of the plan implementation. The implementation stage requires us to determine the best way to reach our (now very specific) goals. The factors we will need to look at include income levels, savings decisions, and investment strategies.

Alas, this is all part of the next installment in this column. Stay tuned.

To send comments or to learn more about Scott Pearson's Investment Management Services, visit http://www.valueview.net

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.

---

Again With the Bubbles?

A few years back ? it seems like an eternity... Read More

The 10 Commandments

Wall Street has been preaching for years and years to... Read More

Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market??

Well maybe that's overstating it a little, but it's certainly... Read More

You Wont Like This

Why? Because I am going to shatter your conventional wisdom... Read More

Stocks: Understand What You Buy!

"There is nothing more frightful than ignorance in action!" Johann... Read More

Discover the Retirement Breakthrough the Federal Government Created for You - The Roth IRA!

If you don't know what a Roth IRA is then... Read More

Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie... Read More

War Market

There is no question that the stock market is being... Read More

Using Sector Funds to Construct Diversified Mutual Fund Portfolios

'Sector funds are too risky.' 'I doubled my money with... Read More

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

A Stock Market Investment Strategy

I feel that an investment strategy in the stock market... Read More

Municipal Bonds

Because there are so many stocks that are NOT paying... Read More

Social Insecurity

Just about everything you have been told about Social Security... Read More

The I Word is Coming to a Town Near You

Hello Inflation, it has been awhile, I see you on... Read More

Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing

Have you ever thought of investing? Do you have a... Read More

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Fundamental analysis.Fundamentals analysis says the best way to predict the... Read More

Stock Trading Secrets?

How often have you come across an advertisement or e-mail... Read More

Patterns

The Law of Chaos is the theory of random unpredictable... Read More

Buy Low - Sell High

Now where have I heard that before? I know. It... Read More

Box Of Chocolates

Ever have one of those sample boxes of candy? Each... Read More

Advantages and Disadvantages of Mutual Funds

Outlined below are some of the advantages and disadvantages of... Read More

Long-Term Investment In Todays Market?

The stock market is very unstable at this time going... Read More

Eternal Sunshine

There is a current movie entitled "Eternal Sunshine of the... Read More

Its Snowing

The Winter Games for the Olympics are coming up soon... Read More

No Load Mutual Funds: Investment Hype vs. Investment Help

With the internet such a huge part of our daily... Read More

Smart Day Trading Strategies to Help You Make Money in the Stock Market

Stock trading can be a very profitable activity. You can... Read More

Small-Cap Stocks: The Beginning of the Journey

When an individual investor wants to roll up his sleeves... Read More

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke

Are you attracted to the idea of being in control... Read More

Discover the Biggest Trading & Investing Online Mistake

Any online investor / trader seeks an excellent off or... Read More

Are You A Stockaholic?

Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More

Which Way The Market

I am hearing predictions by brokers, financial planners, talk show... Read More

How to Evaluate Load vs. No Load Mutual Funds

If you have been dealing with mutual funds for any... Read More

Starbucks Stock is Up

Starbucks earnings are up again and so is their stock... Read More