sociologydude76 wrote:I just want to echo the awesome advice in this thread so far. And as mentioned above, I'm encouraged by the pleasant responses by a newbie question. That's a rarity on the internet!
Let me try to be a bit kinder than my cohorts. The are 3 kinds of investors.
There are the Boggleheads, who are passive investors. We believe in the efficient market hypothesis. We assume that fundamental economic forces will drive the stock market higher. We don't know if the stock market is over or undervalued and we kind of don't care. Over our holding period of 10 years we will reap large gains thanks to the fundamental forces, and that these gains will swamp the piddling overvalued / undervalued factors.
There are the Fundamentalists, who believe they can read the annual reports and divine the intrinsic value of the company, divorced of the popularity contest that is the market. If a company is undervalued they will buy. It may take a few years for the market to realize a company is undervalued but that is o.k., more time for them to buy the company. Some Boggleheads also dabble in this. These people have a time frame from 3 years to 10 years.
Then there are the Technical Analysis which peer into the market to divine if a company will become more or less popular. They have a time frame of less than a year. It is incredible hard to do consistently. Almost no Boggleheads do this or have the skills to do it. This is what you are trying to do.
As such you have kind of came to the wrong place. I would encourage you to research more about Passive Investing and Fundamental Investing (also called Value or Intrinsic Investing). These are areas where a individual investors can acquire skills and compete reasonably in the market.