Plug in your parameters and--presto!--you get a list that meets your specific investment criteria.
Plug in your parameters andpresto! you get a list that meets your specific investment criteria.
Imagine entering a carefully chosen set of criteria into a computer and getting a list of top stocks to buy. You can, with an Internet-based tool called a stock screener, which is designed to help do-it-yourself investors find winners. These online filters sift through thousands of stocks before suggesting a handful that fit your parameters for risk and expected return.
Before using an online stock screener, it's best to know your investment style. Perhaps you want to find fast-growing small-cap stocks, or large-cap stocks whose prices are low compared with the company's earnings potential. Screeners will find a group of names that pass most any test, and many offer preset parameters that save you the time and effort of compiling your own.
"A screener should point you to a pool of worthy candidates in a much more systematic way than scanning the newspaper or Internet message boards," says John Bajkowski, editor of Computerized Investing, a publication of the American Association of Individual Investors ( www.aaii.com). Then you can do the deeper company and industry analysis, to see whether the stock deserves to be in your portfolio.
Not every stock screener is alike. Some cover a larger universe of securities, so giving two screeners the same information may produce varying results. "People assume that all stock screeners look at all stocks, but that's not true," says Jan Parr, editor of Online Investor magazine.
Most leading investment Web sites offer free stock screeners as a standard feature. Among the best:
Quicken's options include "Popular Searches," "EasyStep Search", and "Full Search." "EasyStep" features a smartly detailed tutorial on how to search, and "Full Search" is the most sophisticated. "Popular Searches," perhaps the simplest approach, recommends stocks according to size and growth factors. A plus is the ability to dig deeper without leaving the site. You can also compare stocks or rate them based on risk and price movement.
Remember, though, that search results are only an initial step in the analysisa way to point yourself in the right direction. "They won't make you a good investor, just as buying a hammer won't turn you into a master carpenter," says Bajkowski.
Once you've picked your stocks, you'll want to keep track of how they're doing. The sites we've mentioned offer features that allow you to follow one or more portfolios. Among the potential perks: a "watch list" of stocks you own or are thinking of buying; e-mail updates that alert you to corporate changes and news that can affect a stock's price; and Wall Street analyst reports, some of which you may have to pay for.
Wall Street City, in addition to keeping constant tabs on your stock portfolio's value, allows you to track current quotes, price-earnings ratios, analysts' ratings, trading by key corporate employees, company news, and price projections. A nice feature is "Short-term Breakouts," where you'll find a 30-day snapshot of each stock in your portfolio, to show whether its price is trending up or down.
After you've registered at the site, setting up a portfolio tracker in Wall Street City is simple. From the "Portfolio" page, go to the "Portfolio List" pull-down menu and select "New Portfolio." Then follow the onscreen instructions. The initial setup allows you to enter up to 15 stocks, but you can add more as necessary.
To access MSN MoneyCentral Investor Portfolio Manager, you'll first have to download the free MoneyCentral Deluxe software. Sign in, and then construct your existing portfolio online. Once that's done, you'll be able to check your account's current market value, daily percentage change, total return, and the benchmark Dow Jones Industrial Average. You can calculate stock splits and dividends, and a double-click on the "Advisor FYI" button (under the "Advisor" pull-down menu) brings up breaking news and trading alerts about your holdings.
Quicken works similarly to Wall Street City and MoneyCentral. First, click on "My Portfolio." The free site registration allows you to create a personalized set of stocks and funds. Clicking on "Show Me" lets you see your portfolio's value, historical performance, tax implications, and fundamentals. You can even link your personal brokerage account to the site for stock trading and analysis.
Timely alerts about your stocks are also a key Quicken feature, along with links that let you probe more deeply into a security's valuation. Click "Evaluate Stocks," and you'll get information on the company's growth, financial health, management, and intrinsic value, plus a complete investment summary.
Online portfolio tools are growing up with their users. They offer sophisticated functions and make accurate comparisons so you can see how your portfolio stacks up against market averages and other stocks. And in the wilderness that is Wall Street, you want a surefooted tracker to watch your steps.
Jonathan Burton. The best Web sites for picking and tracking stocks.