First Steps and Favorite Tools for New Investors

How do you find, learn about, and keep on top of your investments?

By Travis Johnson, Stock Gumshoe, November 18, 2014

I get asked “how do I start investing” questions quite frequently, and also questions about what kinds of online (or other) tools I use to research stocks — so I thought I’d start the discussion about this by sharing a few of my favorite things.

First, if you have never invested before and don’t think you understand what a stock is or how it trades or why there’s a stock market, take your time. Read a couple books (my favorites — easy reads for people who’ve never traded before — are The Little Book that Beats the Market and One Up on Wall Street).

ToolsSecond, don’t buy or trade individual stocks unless you find it interesting. This is a hobby, and it can be a profitable one, but there’s no point in doing it unless you like learning about companies or trading techniques and like to follow individual stocks. If you don’t, there’s nothing wrong with buying low-cost index funds or, if you’re a little bit interested, selecting some favorite sectors or better active managers (they still have to be cheap) to see if you can beat the market by a little bit. You’re not likely to get rich trading stocks, so if it’s not a pleasurable experience for you — don’t do it. Investing in the stock market is an important and relatively easy way to get a return on your nest egg that beats inflation, but investing in stocks is far riskier than investing in the stock market.

Once you’ve decided to invest, how do you find stocks or keep learning or what tools do you use? I’ll list a few of my favorite sources and tools, and hopefully others will chime in:

Charting and data:
I’m not a technical trader or chartist, but charts are an excellent visual way to scan the history of a company. I like YCharts for this because I can graph companies’ fundamentals — the history of their price/book valuation, the history of their ROE, or hundreds of other metrics — and compare them to other companies. Even the inexpensive version of Ycharts is fairly expensive ($40 a month, I think, they have a free trial), but I invest in YCharts because I need something better than the free data sources but more accessible and affordable than a Bloomberg terminal, and this is the best I’ve found for that middle ground. This is my go-to source for historical data as well, it’s very useful to be able to look at ten years of a company’s revenue, expenses, balance sheet, etc. When I look at a new stock, I try to take at least a quick look at their historical financials before I learn the “story” of the company — if you see that a company has not grown in ten years, you might interpret the story of their fantastic growth prospects differently. Morningstar is my favorite “less expensive” source of data, though you have to pay a bit (much less than YCharts) to go back more than five years.

Screening:
YCharts is also my favorite screening tool, though the best version of it is not free. Morningstar also has excellent screening tools (also better for the paid version). There are many free screening tools on the web as well, nearly every financial portal site (Yahoo Finance is the most popular) has one, so try those first — they will meet many needs.

News:
I try to read the Wall Street Journal and Financial Times and Barron’s frequently, just to keep a handle on what the overall sentiment is and get some variety of perspective. If you have a focus on a particular sector, you’ll likely find that industry news sources/websites (what we used to call “trade journals”) provide better coverage and are worth browsing from time to time. I browse SeekingAlpha sometimes for ideas and perspective (keeping in mind that it’s mostly opinion — always read both bear and bull arguments about a stock if you can), as well as Yahoo Finance and Marketwatch when I have time to browse.

I keep Google search alerts on all the companies I’m interested in to help me pull in as many data points as possible. I also use both Yahoo price alerts and YCharts alerts when I find companies that I’m interested in but where I don’t like the price — Yahoo will email you when ticker XYZ hits a specific price, YCharts will alert you when any number of data points changes for a favored stock.

Managing Information:
Once you have a portfolio of a few companies, and are researching a dozen others for possible investment, it becomes difficult to keep track of what you’re learning. I like to use Evernote to manage this, it is a fantastic free (also a paid version) clipping service that lets you “clip” articles or full web pages and tag them (with a ticker, or keywords) and keep them in folders if you choose — then it’s all both organized and very searchable so you can find that great article that you vaguely remember from six weeks ago. You can also forward emails to your Evernote account, and they’ll be saved and organized in the same way.

That’s just a quick note to get this process started, I’ll add to it as I think of other tools or sources and would appreciate it if readers would share their own thoughts or favorites with a comment below — thanks!

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JohnM
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Reposted from a main thread DR KSS recently listed his portfolio, and it reminded me to share some thoughts about position sizing. I believe risk-adjusted position sizing is the most important way investors can protect themselves from catastrophic loss. Many great investors never put more than 4% or 5% into any one position. Some won’t put more than 3% in one position. And that is for the safest stocks – the Eli Lillys and JNJs of the world. Look at it this way. You can figure out in advance how much of your portfolio you are willing to lose on… Read more Β»

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SoGiAm
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You are awesome JohnM. Thank you for these sage words. Best2U4U-Ben

invest405
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I have lost the marker for Dr. KSS’ post concerning his latest listings. Would you please direct me to the right search? I would very much appreciate it.
Thank you.

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SoGiAm
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See PAGE #1 link: http://www.stockgumshoe.com/2014/11/first-steps-and-favorite-tools-for-new-investors/comment-page-1/ I was hoping this thread would be a single pager. Best2U4U – Ben

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jeeber
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Oh my God, so much I have to unlearn – bad habits to break, thought patterns to shatter. For so long I have “followed the experts in the newsletters” and have lost so much money (okay not THAT much money) but I am pretty much negative with most recommendations I have followed. Wish I learned about StockGumshoe years ago – or whenever it started – and perhaps I would feel better about things. Spent a decade in real estate investing, and a couple of relationship breakdowns ended that LONG before I had hoped to, and at significant cost (I left… Read more Β»

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SoGiAm
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Welcome jeeber! πŸ™‚ Glad you could join us. πŸ™‚ Best2U4U – Ben

SoGiAm
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Visualization tool for FREE: http://www.watchstockprices.com/
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SoGiAm
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#Fishek,Keshif Save the date- Nov 27, 7pm! Join the next @dctechmeetup at @washingtonpost, support #dctech community, be inspired by ideas, and see raw numbers & strings magically convert to fully interactive exploratory Keshif dashboards, in seconds! To join 500+ RSVPs: https://www.meetup.com/DC-Tech-Meetup/events/241722925/ … b2a πŸ˜‰

SoGiAm
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Medical Dictionary shared by BTL:

Here is a link to the Free Medical Dictionary that you may find helpful as a learning aid (or starting point):
http://medical-dictionary.thefreedictionary.com/

Also, please note that – at the top of the home page – there is also a link to a Financial Dictionary.
Thank you BTL, origination: http://www.stockgumshoe.com/2016/01/cyto-who/comment-page-3/#comment-4663610

SoGiAm
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Free Dictionary extension; thank you DLH:
Folkz if U r not using an extension as recommended by DLH, U r really not kissin’ . ,,, http://www.thefreedictionary.com/
170P/Christensen, a periodic comet
http://encyclopedia.thefreedictionary.com/
From: http://www.stockgumshoe.com/2016/04/barcelona-hot-type-will-gs-4997-make-gild-golden-again/comment-page-1/#comment-4772771

SoGiAm
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Combining Fundamental and Technical Analysis via Direction Alerts; the FANG stocks $FB, $AMZN, $NFLX, $GOOG: http://bm5150.com/public/viewmessage/html/33842/b98eei3cj5w3wlgfxrfg1ny525kw7 Let’s grow #2gether #sharing, #caring, #serendipity #Gummunity. ~ Ben

SoGiAm
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Swingin’ words from the wise ones: HN I did not mean to imply you were wrong to hold long term. I was only saying that it is Also a good stock to trade on swings in prices in my view.Also in my view it is dangerous to so trade unless you have a very good underlying stock you don’t mind holding if you miss the cycle and need to hold for some extended time to avoid loss. I often will trade with half of my long positions to gain a little while waiting for the underlying to bear fruit.That way… Read more Β»

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hendrixnuzzles
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We agree. And I only swing trade with a long bias (long or neutral, never short) if I believe in the underlying stock.

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SoGiAm
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#Stock #Screeners 31 FREE links on ONE page and more: http://www.sharptraders.com/stockscreeners.html

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SoGiAm
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Fintel.io …one tool that you should check out in case you don’t know it yet is https://fintel.io/so/us/apto The site scrapes information from a large number of sources and compiles it on a single page, neatly organised under different tabs! It compiles a bunch of metrics and has made it easier for me to get an overview… Thank you mtpoulsen πŸ™‚ http://www.stockgumshoe.com/2016/12/the-twelve-biotechs-of-christmas-one/comment-page-16/#comment-4917739

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SoGiAm
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#Multiple brokerage accounts
$NoTicker. Hi all, sorry for this slightly offtopic post but some might find it useful. For people who have multiple brokerage accounts there is a nice tool if you want to have a view of your whole portfolio in one place. Here is the link: http://www.twoinvesting.com/2015/11/international-dividend-portfolio-tracker-with-transactions-page/. It’s basically a google sheet spreadsheet to which you add your stocks and buy/sell/dividend transactions. It’s a great tool. I have made various tweaks to it to handle options and forex transactions. If anyone need help with it I can give a few pointers.
Thank you Doomie!
original link: https://www.stockgumshoe.com/2017/06/oncotutorial/comment-page-2/#comment-4940361

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SoGiAm
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Danmcco posted in answer to this question: What method(s) do yo utilize to keep the SpreadSheets fresh? https://www.stockgumshoe.com/2017/09/cisco-chang-charlie-part-3/comment-page-6/#comment-4953039
SoGiam $VICL np, $SCYX small long. I use Fund Manager.
https://www.fundmanagersoftware.com Than you Dan! Best2ALL

danmcco
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I recommend downloading the trial software. It updates all my US and Canadian Stocks, options, warrants, MFs etc online whenever i want. Regular version is $99 pro is $295 . Biggest differences come down to Max Investments in a Portfolio 500 vs. 5,000 (pro) and some extra analytics. It will do any number of portfolios. I have two each for my two kids, three different joint accounts (td, questrade, IB) and TFSA (tax free savings) and RRSP (retirement account)s for my wife and the same for me. Can connect directly to most major us brokerage firms to update. The portfolios… Read more Β»

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SoGiAm
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Fellow #digitalnomads here is a list of cool stuff ->
https://twitter.com/bromad666/status/910881389352046592
#Awesome #DigitalNomads Awesome

A curated list of awesome resources for Digital Nomads.
Looking for contributors. Submit a pull request if you have something to add πŸ™‚

Please check the contribution guidelines for info on formatting and writing pull requests
https://github.com/cbovis/awesome-digital-nomads Best2All!

SoGiAm
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#1stTime – Link: https://www.stockgumshoe.com/reviews/motley-fool-rule-breakers/david-gardners-the-next-amazon-com-stock/comment-page-1/#comment-4968174 Author: Eliza Comment: Timeless #ThankYOU πŸ™‚ For a 25 year old investing $500 I would use Robinhood app. You will get free trades and you can diversify even a small amount. You can also buy something already diversified like QQQ. It is an ETF, or exchange traded fund, which means one share contains little pieces of a lot of our tech favorites, such as Apple, Microsoft, Google, etc. One QQQ gives you a nice diversified core to your small portfolio with good returns, then you can pick and add favorites to swing trade or to buy… Read more Β»

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SoGiAm
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A #Glance at Finviz.com this day 20180117
https://finviz.com/
icker Last Change Volume Signal
RCON 3.03 77.71% 46088628 Top Gainers
BEBE 6.10 37.39% 129392 Top Gainers
MYSZ 2.66 24.30% 29155232 Top Gainers
HAWK 45.05 23.42% 31950014 Top Gainers
NEWA 15.80 21.54% 330615 Top Gainers
NCTY 1.18 18.00% 14122333 Top Gainers
APTO 2.80 12.90% 1585220 New High
ACUR 0.61 14.02% 87789 New High
NWBO 0.37 9.97% 3878355 New High
MRTX 24.25 -2.02% 1171545 New High
DST 83.63 0.14% 2238871 Overbought
FLR 58.03 1.68% 1905746 Overbought
NUAG 24.42 0.16% 1327912 Unusual Volume
NASH 28.89 -1.05% 40730 Unusual Volume
RCON 3.03 77.71% 46088628 Unusual Volume
FNDB 38.58 -0.39% 1018493 Unusual Volume
FOXA 36.29 -1.20% 7149792 Upgrades
ABIL 0.53 -6.25% 653366 Earnings Before
BRN 2.30 4.13% 3951 Insider Buying

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SoGiAm
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Author: Investor Clouseau Comment: $humble advice Investing in cheap stocks looking for huge amounts of growth is, as mentioned here already, pretty much gambling. Tinkering around with things like options on a very limited budget (something I’ve done in the past with “mad money”) doesn’t allow you to buy enough different positions to catch enough of the rare big winners and more than cover the many assured losses. If you decide to go the boring but more-or-less tried and true route of long term, sturdy, usually dividend paying stocks then my advice (and something I still mentally struggle with) is… Read more Β»

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SoGiAm
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11 Powerful Investing Quotes From The World’s Best Investors January 19, 2018 4:45 pm by Sure Dividend See also the 8th wonder of the world according to Einstein > https://www.stockgumshoe.com/2016/04/microblog-72-the-rule-of-72/ Investing is unique in that there is tremendous opportunity to learn from the best in the business. Investors like Warren Buffett, Seth Klarman, Joel Greenblatt and Benjamin Graham have made a concentrated effort to educate investors everywhere through their writing, speeches, and other communications. This article will summarize some of the best quotes from the most talented investors in the world, and describe how we can learn from the teachings… Read more Β»

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Jim
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Battle for Investment Survival by Loeb is a classic in showing when to buy value situations.
JJD

SoGiAm
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Zero commission for trades at TD Ameritrade starting today, October 03, 2019.
Zero commission for trades at Charles Schwab and E-Trade beginning October 07, 2019.
Interactive brokers and Robinhood is already zero commission for trades.
See your broker(s) for details and further information.

Singing in the Rain πŸ™‚
Tunez > https://twitter.com/Bowie1960s/status/1179098639286898689?s=20
Best!