You have decided to buy some stock or mutual funds, but wonder which one to buy. You need more information so you call your broker for advice. A so-called full service broker will bury you with all kinds of reports, analysis sheets and other pretty pieces of paper, but will probably try to sell you something that makes him the most commission.

Lets see. What does Wall Street think you should know? Of course, you will want a company that is currently favorable or hot like WorldCom used to be. Then you need to look at their financial statement that has been audited by a big accounting firm. like Arthur Andersen. You really should check to see if they have any big outstanding financial obligations that have little asterisks next to them in the Annual Report like under funded pension plans.

Of course you will want to get their financial statement to check their P/E ratio. Thats Price/ Earnings or how many years of earnings it will take to make back the price of the stock today. The lower that number the better. For many years the average has been about 14. If it is above 20 or 30, well '? We wont factor in the rate of inflation that will dilute the buying power year after year. And there are lots of other numbers like this Wall Street says you should be studying.

Maybe it is easier to buy a mutual fund. You can go to Morningstar for every bit of information about a fund you can think of. They will show the breakdown of the funds portfolio, but that can easily be 6 months old. They do have those star ratings. From one to 5 stars, but I cant recall seeing any one star funds and hardly any 2 stars. Why? Well, I think they dont want to offend the fund manager even though he is not making money for his clients.

In fact, they love to give 5 stars to funds that have had losing years one after another. Unfortunately some of their information is out of date. They do list all the stocks the fund owns, but the fund may have sold them so you cant tell for certain what they are investing in.

Brokers want to send you reports, graphs, company updates, interim reports and I dont know what all, but stop and ask yourself, If I can get this so can everybody else so what good is it? Now youve got it. None. All that information will not tell you that after you buy it it will go up and thats all you want to know.

Basically there are two things you want to know. 1. Is it going up? 2. If it goes down where do I sell it to protect my capital? Thats all the information you need.