The best stock tips are those that most people don’t know about.  That is why it is risky to get stock market tips from other people.  This is especially true if you get them from major news outlets, stock analysts, and top finance newsletters.  Again, the good stocks to invest in will go under the radar of most investors.  That being said, here are some things to consider when you hear or read about hot stock tips.

First of all, if you hear them from investment bank equities analysts, let me offer some insights on what goes on behind the scenes.  A great majority of stock investment tips that come out of these analysts are buy recommendations.  It is rare that you see a hold recommendation let alone a sell.

The main reason really has to do with politics and business.  Unfortunately, most of these recommendations are severely biased toward their own business.  You see, if an analyst at a investment bank issues a sell recommendation for a stock, then the bank can kiss that company goodbye as a potential client.  If a company is looking to do a merger or acquisition at some point, they will most likely not go to the bank that suggested investors sell that stock.  It’s unfortunate, but true.

That is why analysts are so hesitant to make sell recommendations.  But that is also why if they do, you should take a serious look at that stock to sell it or short it if you don’t own it already.

Now let’s talk about their buy recommendations.  The problem with these is that once a recommendation is made, it goes on the radar for the general public.  This reduces the likelihood that there is still value in buying the stock.  The downside to hot stock tips is that it increases the chances that the stock will be overpriced.

The tricky thing about these stock tips is that almost anyone can prove with hindsight all the great picks that they had.  But they need to prove that overall, their stock picks in aggregate had a decent return that beat the market.  Everyone has at least a few stocks that did overwhelmingly sell.

So if you want to find good stock tips, you need to find them in places that won’t get a lot of exposure.  In addition, when you do see one that you think has promise, you need to do your own research to make sure it’s up to par with your investment strategy.

In addition, if you are looking for stock market trading tips, you will rarely find them on the internet fast enough for you to take advantage of it.  When traders spot a good opportunity, they don’t sit there and consider it for even a minute.  They jump in and out before you’ve had a chance to think about it let alone post it on some website.