A note of suggestion or thinking that initiates the further analysis of a potential investment. Stock ideas can be thought of when news comes across the wire, or when the suggestion is heard from another analyst or investor.

Watch: What Are Stocks?

The main thing to remember when you hear a stock idea is to approach it as objectively as possible and to look at the positives and negatives along with the potential risks. Too often, an investor will take a position on a security based on what someone else said, rather than performing his or her own analysis of the company.

There is no substitute for doing your own homework on a particular firm, and you should never substitute someone else's judgment for your own.