Perhaps the most important step in investing in stocks is the actual selection of them. This selection will either make or break you, do put some proper tender loving care when it comes to making the decision. There are two main means of analysis that you may consider:
a) The Technical Approach
Technical analysis is the study of supply and demand. If you are someone who is intuitive and able to read market signals to predict possible price movements, this approach is for you! An advantage to this approach is time — it can be studied daily, weekly, monthly or even yearly.
Otherwise, you can always hire an expert to do the work for you.
b) The Fundamental Approach
Fundamental analysis is the study of the financial health of a company in order to determine the value of their stock. There are 3 main financial statements that need to be evaluated: a balance sheet, cash flow statement and income statement.
In regards to what stock investment is the best type, any potential investment that has a good mix of quality and value. Quality refers to a healthy cash flow or good earnings growth. While value refers to the current price of the stock, its sales and profits.