The Ultimate Investment Checklist

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All great investors have unique skills.

But they almost always share a common characteristic:

Using checklists.

If you don’t ask the right questions before investing, you won’t profit from your stock picks.

So if you want to go from a mediocre investor to a great one, answer these 50 questions before you buy your next stock:

Business Fundamentals

1. What does the company do?

2. What is the competitive advantage?

3. What is the growth potential?

4. What is the industry like?

5. What are the key financial metrics?

6. How long has the company been in business?

7. Do I understand the industry?

8. How does the business model affect the stock valuation?

9. How does the company differentiate itself?

10. What are the company’s weaknesses?

Business Model

1. What is the product/service?

2. Who are the customers?

3. How does the product/service compare to the competition?

4. What are the plans for developing these products/services?

5. Does the company have any IP?

6. What problem does the product/service solve?

7. How does the product/service work?

8. What are the marketing/sales strategies?

9. How do customers feel about the product/service?

10. How often are sales made?

Financials

1. What is the company’s financial health?

2. What metrics matter most?

3. What are the revenue and profit trends?

4. What are the debt levels?

5. What are the cash flow trends?

6. What are the financial strengths?

7. What are the financial weaknesses?

8. What is the dividend yield?

9. What do the valuation metrics say?

10. What opportunities exist to improve financials?

Management

1. Who is on the management team?

2. Do they personally invest in the company stock?

3. What are the succession plans?

4. What are the corporate governance practices?

5. What are the experience levels of the management team?

6. How does management handle conflict?

7. How does management measure success/performance?

8. How does management handle risk?

9. What is management's track record?

10. What is management’s compensation?

Risks

1. What are the most significant risks?

2. What is my risk tolerance?

3. What are the alternative investments I can consider?

4. What is my exit strategy?

5. What is my holding period?

6. What regulatory risks surround the company?

7. What environmental risks surround the company?

8. What social risks surround the company?

9. What economic risks surround the company?

10. What risk mitigation strategies are in place?

Some of these questions are more relevant than others.

It all depends on the specific stock, sector, and industry you’re looking into.

A lot of the questions will answer others too.

So why did I share this checklist with you?

Because in addition to knowing the information each question seeks, it shows you what it takes to invest in individual stocks.

This is how an investor needs to think about each company they want to invest in.

You won’t get far with surface-level research. There’s no edge in what others have written or what Google says.

Being a great investor requires much more than the ability to browse the internet.

It requires asking the right questions to gain a deeper insight into the company of interest.

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