Although many will go through a brokerage firm and trust the company’s instincts about where to put investor’s money, some may want to try their hand at it themselves.
Developing a strategy for yourself requires more than looking through the list of symbols, closing your eyes and putting your finger on a stock to purchase.
Stock screener applications can help you fine tune a strategy to get the most out of your investment. How can they help you develop a means to find the best stocks to invest in?
1. Filtering Poorly Performing Companies – Stock screening applications have the ability to filter out companies that are performing poorly. While this is speculative to your own requirements as you control the settings, you can comprise a list of companies that have stocks performing a certain way. Your criteria is what will be displayed minus those you don’t want to view. For instance: By using the filters, you can eliminate stocks that had a low dividend yield the quarter before or tune out stocks that fell under a specific dividend yield percentage.
2. Options to Choose From – Some of the best stock screening applications will have a wide range of metrics to choose form. You can modify all kinds of variables in order to select the perfect company to invest in. While some screening applications are a bit limited when it comes to this information such as Yahoo Finance, others can be quite elaborate such as those located at Zacks.com. Stock screeners allow you to pick and choose which metrics are perfect for you in order to build the best strategy possible.
3. Additional Information – Nearly every stock screening application online provides detailed information about the company you are choosing. Aside from the performance chart that displays the day’s open and close amounts, articles concerning aspects of the company’s business are displayed as well. When used in conjunction with a web monitoring service, you can get immediate information about the company you are filtering in order to create a better strategy for your money.
4. Portfolio Management – Many of the stock screeners that are on the Internet offer portfolio tracking. Applications such as Google Finance can track your portfolio using the companies you filtered from the screening section. You can use this aspect in order to test whether or not your screened companies will be profitable or not. This can be greatly helpful to determine screen settings for future investments if you find a method that works well in simulations. Portfolio information is usually produced in real time showing you the exact value of your stock collections. Even if you are using the portfolio as a simulation practice, you can fine tune your searching parameters if the stock does poorly without investing a single dime of your money. However, it can be depressing if a company you filtered wound up becoming the next biggest thing overnight.
Many stock screening applications don’t cost money in order to test the waters before you invest. Google Finance is one of those applications that can do it all while giving you insight to the company in question. As this is free to dabble in, you lose nothing by attempting to capitalize on the stock market yourself – cutting out the middleman. Just always remember that a “sure thing” isn’t always that assured.
This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: liznelson17 @ gmail.com.