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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yadnhoj
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I’m looking for a chart BOOK, not online charts. There used to be Trendline anx Quote Digest and others. I can not find anything under several $00. Thanks!! John

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SoGiAm
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Warren Buffett’s annual letter to Berkshire Hathaway (BRK-B) shareholders: http://www.berkshirehathaway.com/reports.html is always an excellent read. If you’re new to investing, read the past 20 years of Berkshire letters (they’re easy to read, have no fear) and you’ll get a really good basic education in Buffett’s value-inspired and patient philosophy.

SoGiAm
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Time Value of Money Concepts:
Steve, the slow way to find the present value for a future amount is this:
http://www.frickcpa.com/tvom/tvom_pv_ss.asp#formula

The fast way is to find it is this:
http://www.miniwebtool.com/present-value-of-lump-sum-calculator/

Thank you for sharing zimmyzee. πŸ™‚ Best2All-Ben

SoGiAm
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#Beware the 3x whammy: Triple-Leveraged ETFs Carry Wealth Risks http://www.wallstreetdaily.com/2016/05/30/triple-leveraged-etf-3x-bull-bear/

investor101
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Thank you for this help. I am reading and learning as fast as I can.

ben3volent
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ben3volent

I’d be interested in an elaboration on your Evernote workflow. I use it a lot, but I’m not sure how to optimize the workflow for keeping track of investments.

Virginia Scanlan
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Virginia Scanlan

Two invaluable sources: Charles Kirk’s “Kirk Reports” and Chuck Carenvale’s “Fast Graphs.” Kirk keeps you focused on what the market is actually doing and provides a list of potential winners for trades. Carnevale’s charting and data tool provide invaluable information about pe’s, yield, earnings and dividend history, and much more. After recently buying the premiums service, I got a look at what owning Dividend Aristocrats can do for you over a long period of time, typically widely outperforming the S&P. His blog posts are invaluable and provide stocks for further analysis.

SoGiAm
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For new Irregular members this tread is essential to assist your in your investing journey: http://www.stockgumshoe.com/2014/11/microblog-guidelines-for-new-members-posting-rules-and-etiquette/ Best2ALL-Ben

SoGiAm
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Re:post #208-212 Payla
From what I gathered from Travis discussion is: yahoo/finance ycharts.com fda.gov Health&bioTeam sec.gov (financials, filings) finviz.com TA-Charts google/finance general esp. for Internationals bloomberg.com reuters.com this list go on and on… your input is greatly appreciated πŸ˜‰

SoGiAm
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http://www.advfn.com/ Provides: ADVFN PLC Free Membership Monitor Quote Charts Trades News Financials Toplists Alerts Portfolio Level 2 Boards πŸ™‚ Best2You-Ben

SoGiAm
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ddnotesmaker.com A free real time due diligence report generator for any publicly traded company. { information included: charts, latest news, share structure, insider holdings, competitors and industries, revenue, profit and margin trends, management and share ownership, analyst reports, … }
Enter your ticker symbol in the searchbox or pick one from the hottest stocks cloud.
Comment-This site focuses on OTC equities, however, many links are available for most equities.

SoGiAm
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Whale Wisdom: http://whalewisdom.com/
What are 13F Filings? 13F filings are submitted quarterly by any manager controlling investments of at least $100 million. Thank you Glenn Newberry. http://www.stockgumshoe.com/2016/06/quickster-introducing-scynexis-scyx-a-new-antimicrobial-play/comment-page-4/#comment-4849259 – Ben

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SoGiAm
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Insider Monkey: …It is insidermonkey.com what this site does is show you what the BIG BOYS, the hedge funds are putting their money in. Doesn’t cost you anything which I really did appreciate… Thank you investor101; thought it was previously posted here. http://www.stockgumshoe.com/2016/06/microblog-gold-bull-investments-for-the-next-leg-upjune-2016/comment-page-2/#comment-4852790

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hipockets
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Travis — This is great. Thank you.

Alan Harris
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Alan Harris

Ditto

SoGiAm
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Alan-Trying to learn from ol’ SGS- Travis can volume. technicals etc. be included on dashboard in ycharts? If so how please. I was approved for IB account yesterday. I chose friends and family and then adding individual accounts from friends in Houston, Indonesia, New Zealand, UK. I also am selling long held certificates in Reliant Resources which became CNP, SO, WR,AB, Ameren and Houston Industries which became AEP and Genon hich became NRG. I was favoring TD Ameritrade to tender these transactions. Do you suggest a better brockerage? I have an e-mail to IB of tender questions; no response yet.… Read more Β»

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SoGiAm
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Have been following the chart picks for a while Ben, not always right but have had their fair share of good calls.
http://stockoodles.com/#page/charts/charts.php?action=loadData&symbol=TRVN
Cheers,Glenn
Thank you Glenn (i.e. super-slueth) for the oodles. I have not see that tool in quite sometime (or ever). Lqqkz like a great tool. πŸ™‚ Best2You-Ben

SoGiAm
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Choosing a Broker: Interactive Brokers is consistently rated #1 by Barrron’s and is the choice of many members of the Gummune. IB offers Global Access to most markets, Exceptional Service, Low Cost, Best Execution, Trading Technology, Risk Management, Comprehensive Reporting, Strength in Security and Education:
https://www.interactivebrokers.com/en/home.php

Here is a link to review other major brokers: http://www.stockbrokers.com/onlinebrokerreviews.html

Additional low or no cost brokers that have cropped up recently include Robinhood, Motif Investing and Loyal3 Best2ALL-Ben

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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/ πŸ™‚ I was hoping this thread would be a single pager. Best2U4U – Ben

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gard
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Love your last comment πŸ™‚ And of course my favorite place to go for stock information is
Stock Gumshoe. For Charts/fundamentals/screening&alerts , other than my Brokers ( IB and TradeKing) I’ve found Nasdaq.com works well for me. I use to use YahooFinance, but I really don’t like the new Interactive chart, can’t even get basic charts/tech any more. I’ve tried yahoo answers, comments, email, and can’t find out how to get the old Yahoo back. Any Ideas out there???

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Alan Harris
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Yahoo’s message boards are swamped with complaints. Apparently there is no way toget the old charts back. You could try http://stockcharts.com

SoGiAm
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To locate (Find CTRL+F) or reference comments – Posts in stockgumshoe: alanh says: March 7, 2016 at 5:45 am Ben: Other than from the original notification email, how can we find the real comment number? March 7, 2016 at 6:00 am Yours alanh http://www.stockgumshoe.com/2016/02/special-commentary-turbulence-for-esperion/comment-page-4/#comment-4724452 and the traveller http://www.stockgumshoe.com/2016/02/special-commentary-turbulence-for-esperion/comment-page-4/#comment-4709927 Travis Johnson, Stock Gumshoe says: March 7, 2016 at 8:51 am The direct link to any specific comment is under the commenter’s name β€” the dateline is the link to that comment (ie, for sogiam’s reply the link β€œMarch 7, 2016 at 12:42 am” is the permanent link to that comment). You… Read more Β»

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SoGiAm
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Travis, Lynn, Alan- Would it be possible to, in short order, make a archieve microblog of all posts to RECENT DISCUSSIONS in chronological order-one line ticker tape style? πŸ˜‰
Travis this is what I was trying to describe months ago but the switch wasn’t flipped until now. Long SGS Best-Ben

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SoGiAm
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1st 16 US Presidents in chronological order: WashAdJaMadMonAdJackVanHayTyPoTayFillPierceBuchLinc

hipockets
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???? πŸ™

gard
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Laughable of course

gard
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I think you mean Alan Harris but I will tell you what works well for me(if I understand what it is you want, that is). At the bottom of the blog you can subscribe to the thread and receive automatic updates to your email. I use hotmail and have created a folder for stock gumshoe and have them sent to that folder. Then I open that folder and look at the comments on that thread and look at the date so it’s easy to find when I go back to SG.(all the blog posts on GS are dated). Hope this… Read more Β»

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SoGiAm
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Thanks Alan Pennock for shining the light for the ignorant, i.e. me.
Re: post 7 Above=Hi Pockets that was taught to me by a student of: T. Harry Williams (May 19, 1909 – July 6, 1979) was a historian at Louisiana State University in Baton Rouge whose career began in 1941
Best-Ben

SoGiAm
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Post #7 above-Alan Pennock-Your offered solution does not negate the need for a chronological listing of posts in RECENT DISCUSSIONS. Being a ‘newbie” with perhaps way too much free time on my hands I have reviewed a fair amount of microblogs (threads) and have noticed that members are often unaware of posts that are directed to them simply because they were written (posted) in another Microblog. I have also noticed that members who do not frequent the site or atleast do not post frequently seem to get lost as to where recent discussions (the crowd) moved to. My intent for… Read more Β»

gard
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Agreed, it would nice. Not really necessary for me, I have my workaround.

SoGiAm
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Alan P- Re: Work around… Will you please share such with us?
Long SGS

Alan Harris
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Alan Harris

Sounds like a q for Travis, not me. But can you give us the last 10 English Prime Ministers? Start with Bumhole and end with bunhole!

gard
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I could care less about the last 10 PM’s of anywhere.

SoGiAm
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TMX Money CN Exchange: http://www.tmxmoney.com/en/

Alan Harris
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Alan Harris

All (except KSS!!): Theres a new post on Jingle Bells. I urge you to read it v soon. http://www.stockgumshoe.com/2014/11/microblog-jingle-bells/#comment-3379639

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SoGiAm
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SmallCap Network is a FREE daily letter and
SmallCap Network Elite Opportunity Free Mobile Text and Email Alerts.
https://www.smallcapnetwork.com/pages/SCNEOL/v1/
This is not a recommendation to purchase or signup for services; it is an FYI and is a service that I chose to receive and that I enjoy reading. Best-Ben Long SGS, Dr. KSS.

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biotechlong (btl)
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Scott Reitmeister is an astute market observor and editor of a premium Zack’s newsletter. Although (as of Dec 15th) he is a firm believer that bullish catalysts remain intact for 2014 year-end and 1Q 2015, he offered this sobering thought in reply to an inquiry about how low stocks could go: “The market can stay illogical longer than you can stay solvent.” P.S. I tried Zack’s premium services for 30 days – with an overall positive impression, but I elected not to continue because the premium service fees charged are (IMO) excessive. However, I do subscribe to a worthwhile $5/month… Read more Β»

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SoGiAm
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KSS Dungeon (No-Fly) Biolist reposted from Post 310 Tloglodytes: http://www.stockgumshoe.com/2014/12/microblog-dawn-of-the-planet-of-the-tloglodytes/#comment-3670356 Hi Pockets says: December 18, 2014 at 12:48 am I’ve used Frenchie’s list of KSS’ undesirables to create a srpeadsheet for same named ” KSS’ Dungeon ” at https://docs.google.com/spreadsheets/d/1f8TiuDeQRJmQZZ6HjidLOG6NjkUr0xqoz03HUOEjpHc/edit#gid=0.
The tiny URL is http://tinyurl.com/KSSdungeon There is a typo in the title that I do not know how to correct. Thanks, Frenchie and jer_vic for the list. I will try to keep it updated.
Best to All! – Ben

SoGiAm
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Hi Pockets (Our dungeon Warden and Zoo-Keeper extraordinaire) Please consider adding the following to the to the dungeon: 1.) RMTI-re post 180 http://www.stockgumshoe.com/2014/10/microblog-ebola-to-parse-perchance-to-parlay/ Dr. KSS, MD PhD, author of this article, says: November 4, 2014 at 6:40 pm I am stunned that Rockwell Medical $RMTI gained more than $80M in market cap, by means of a 21% share price rise, in heavy volume today. Its adcom meeting is this Thursday for Triferic, and I feel the FDA is more than 85 per cent likely to vote no on this questionable drug from this dubiously managed rinkydink company and its tattery… Read more Β»

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hipockets
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Done, Ben. Thanks, and Happy Holidays.

alanS
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alanS

re: KSS Dungeon

Many thanks to Hi Pockets (and also Ben) for your efforts to build a secure moat to protect us from inadvertently or unwittingly wandering into the KSS’ Dugeon.

I recall that there was also discussion a while back about constructing the positive counterpart—a spreadsheet of KSS’ gems. I’ll be much obliged if anyone can provide me with the URL for that?

steviMT (aka Alan the Lesser)

SoGiAm
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SteveMT re: Post 249 from Toglogytes -Yen LIN,
Here is the original link to the spreadsheet:
https://docs.google.com/spreadsheets/d/1NlmYXe4nn2BNlRQ8cxhqomq4lOj04Jh1VP3Z_C7-cjY/edit#gid=179896108
If you look at post #252 Denis Smalley has kindly transformed the address into a much smaller URL – http://tinyurl.com/n9sulbc – that will make it easier to copy.
It’s an impressive amount of information, all magnificently managed by OpposableThumb!
Best to ALL!-Benjamin

SoGiAm
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SteveMT-Please forgive me the post above is for all equities written about by Dr. KSS. A list of “gems” is here: From Tlogloytes post 49: Companies I have long positions in, and present trading sentiment ACHN Achillion hold vs buy AGIO Agios hold after ASH run-up ALKA Alkermes hold after recent massive surge ACT Actavis hold vs buy AKAO Achaogen buy ATNM Actinium hold vs buy ARWR Arrowhead hold Benitec hold vs. sell BIOZF BioTie buy Boston Sci hold CTIX Cellceutix buy CLDN Celladon buy CELG Celgene buy Cubist hold vs sell ESPR Esperion buy GILD Gilead buy Intuitive Surgical… Read more Β»

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Lulu
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