If you want to be a successful carpenter, you need the right tools. You can’t just live with a hammer, nails, and a handsaw. It might work for you in the beginning, but as you improve your skills, you need to improve and expand your toolkit.
It’s the same for investing. If you want to be a successful investor, you can start with a few basics but once you get more sophisticated, you’ll need more data and more tools to help you make profitable decisions.
Feature-Rich Brokerage Account
If you’re just buying index funds, you should just go to the fund company’s website and use them. Vanguard for Vanguard funds, Fidelity for Fidelity funds, and Charles Schwab for Schwab funds. You don’t need analysis, Level 2 data market data, or anything like that (because it doesn’t really exist!).
But if you want to trade individual stocks, you need a brokerage with that suite of tools integrated into the platform. For that, I suggest you look at two options – tastytrade and Robinhood. Both offer commission-free stock and options trades, a pre-requisite now. tastytrade is an extremely sophisticated platform with a powerful app with every tool and analysis you can want. The only downside is that there is limited external research and data.
Robinhood is a bit more beginner friendly and practically no third part research. They do, however, entice you with a free stock to sign up.
In-Depth Analysis Tools
Brokerages don’t typically have in-depth analysis and so you must turn to other services such as Morningstar, which is a storied name in investing research. Their analyst reports are an easy way to get up to speed on a company in 15-20 minutes. Once you pay for their service, you can get an even deeper breakdown of the company and that research will always be put in context with respect to their current stock price.
Market Commentary & Analysis
Whereas Morningstar shines with their private analysis, Seeking Alpha is a powerful platform for collating market commentary on companies. They also simplify it somewhat through the use of ratings, such as Quant Ratings, Author Ratings, and Wall Street Ratings. These are consensus ratings based on the inputs. For Quant Ratings, it’s their own calculation based on factors such as valuation, growth, profitability, and momentum. The Wall Street Ratings is the average of the consensus from outside research firms with “sell-side” analysts covering the company.
Stock Picking Service
If the universe of stocks intimidates you, you could always filter it down through the use of stock market picking services. One of the oldest is that of The Motley Fool, whose flagship service is known as Stock Advisor. Every month, they send you two picks, along with their research and reasoning, monthly rankings of companies, as well as three beginner strategies based on your risk tolerance. You also get access to all their educational materials.
Daily News Emails
I’ve stopped visiting websites to get my news, I rely on daily emails from trusted news sources that will give me a recap of what happened the day before. The one that stands out as being the most casual and readable is the Morning Brew. It covers all the high level news stories from the previous days in an engage manner and it’s free.
Another newsletter that I find useful is 1440. I’ve only recently subscribed to this free newsletter but it gives me current events as well as what’s happening in the markets.
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About Jim Wang
Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard’s Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.
Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology – Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.
One of his favorite tools (here’s my treasure chest of tools, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you’re on track to retire when you want. It’s free.
Opinions expressed here are the author’s alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.
