Introduction to the Stock Selection Guide (SSG)

Computerized SSG Tools BetterInvesting's online stock selection tools, SSG Plus and CoreSSG, include historical data for North American equities and step-by-step tutorials. MyStockProspector.com is a fundamental screening tool with criteria focused on aspects of the SSG. StockCentral.com features an online SSG-based stock analysis tool, stock screener, message boards, sector and industry averages, and company reports. ICLUBcentral's Investor Advisory Service and SmallCap Informer newsletters use the SSG to select, analyze, and follow stocks.

The Stock Selection Guide™ (SSG™) was originally developed in the 1950s as a paper worksheet by the not-for-profit National Association of Investors Corporation (NAIC) (now known as BetterInvesting®). Over time, the tool has been computerized and updated, but the precepts of its investing methodology remain much the same.

The SSG aims to aid individual investors in the fundamental analysis and selection of common stocks by reviewing components of a company's growth, quality, and value. Using the SSG, an investor can identify the characteristics of a growing business, and plot potential future growth from historical trends.

The SSG also helps an investor determine a reasonable value for the stock, suggesting purchase when the stock is temporarily on the cheap side of a value assessment.

The SSG is not a "black box" analysis tool, one that uses mathematical formulas to prognosticate the future. It requires an investor to apply his or her own judgement to many factors in the analytical process, such as the likely pace of future growth and the most reasonable range of P/E ratios within which a stock is likely to trade. When followed consistently over time, the SSG can aid investors in discovering stocks which are likely to increase in value over the next five years.

The following tutorial attempts to de-mystify the Stock Selection Guide, to explain its components step-by-step, and to point out areas where an investor's judgment should be carefully applied.

While this tutorial focuses specifically on the SSG, a special effort has been made to emphasize the tenets of long-term, growth stock selection that any investor may utilize.

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