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Research tips to kick off your wealth-building | Money Smart

There’s no one right way when it comes to investing. But reaching your goals starts with a few simple steps. Here’s how to kick off your wealth-building responsibly.

SAN ANTONIO — SAN ANTONIO – There’s no one right way when it comes to investing. But reaching your financial goals starts with a few simple steps. Here’s how to kick off your wealth-building responsibly.

Research

There’s an abundance of information online and programs that can teach you about finances. KENS 5 spoke with Karl Eggerss, senior wealth advisor and partner of Covenant, on ways to start. 

He says one of the best places to review a company's performance is by looking at their annual reports. Public companies are required to file financial statements to the Securities and Exchange Commission (SEC). Eggerss said new investors should also, look at the company's insiders.

"In other words, are people inside the company buying more of the stock or selling more of the stock? That’s public information that we can see," he said. "You have to know what does the company do, where are their expenses coming from? Just like you would manage your own household."

Check out data analytics companies

If you need help digesting the financial information, there are companies like MorningStar, Value Line, or Zacks Investment Research that can break down the information for you.

"You’re going to pay a premium for them but it’s worth doing because, again, if you’re going to make an investment, you have to do your research. In the stock market, we’ve seen a lot of volatility, a lot of people who have had a gambling trading mentality. That’s not investing. That’s not what we’re talking about. That doesn’t take a lot of research. That’s just looking at a stock chart and wanting to make a quick trade," said Eggerss.

Avoid this big mistake

He added that investors should avoid choosing a stock based on an opinion.

“They like the product, they think people are using it. Maybe they are, but they haven’t looked at how much debt the company is taking on. They haven’t looked at the management, is the CEO about to retire?” said Eggerss. “That’s probably the biggest mistake, people saying I use this product. Surely, it must be a good stock. Oftentimes, those are two different things.”