Last month, we discussed some of the basics of picking a stock. We talked about how the stock market works and how to buy and sell stocks. But estimating the value of a stock is a complex and inexact science. There are thousands of different approaches to picking a winning stock, and if any one of them worked all the time, we'd all be rich. But we aren't. So to try and help you have fun and make money in the market, this month we present a survey of sites on the Net where you can get advice and information about picking a winning stock.
But before we go on, a word of warning. As scientists, we're used to publications being peer reviewed, informed, and objective. To prevent as many potential conflicts of interest as possible, a journal like Science keeps its editorial team as far away from sponsors and funders as possible. The business team handles that side of the biz. This is NOT the case with most business publications, no matter how prestigious. In fact, in many cases, writers and analysts will have stock in the companies they analyze. The analyst benefits in two ways if they can convince you to buy stock in a company that they have invested in. First, they get richer because the stock they own went up in value, and second, the analyst's predictions come true, making them even more credible the next time! So always base your purchases on more than one source of information, or even better, do your own research into the company. Some of the sites below will teach you how to do that.
Now that you've been warned, we'll discuss the sites, which I've divided into two groups: investment education sites and investment information sites. The investment education sites provide excellent educational information about the stock market, valuation or options trading, how to pick stocks generally, and how to invest. The investment information sites are sites where educated investors go to find information about specific companies. These sites may have analysts' reports, stock picks, market surveys, and other specific information about picking a winning stock.
Investment Education Sites
Edustock offers tutorials on the stock market and how to price stock. Click on "the stock market" for an excellent tutorial on how the stock market works. The site also has a stock market simulator that allows you to invest virtually. After you register, the site gives you $100,000 to "invest" in the stock market. The site will keep track of your stocks and tell you how much you've made. This is a great place to start learning about investing without putting up cash of your own!
The Street is one of the best investment Web pages around, which is why it's included in both our investment education and our investment information sites. The Street has articles on everything from getting started with stocks to filling out your U.S. tax returns. Content is regularly updated, so keep watching the site.
This site covers investment advice for women. It is loaded with content, but, rather than educational, it's mostly tips and advice on how to change your lifestyle to be more financially astute. "Four ways to boost your earnings power," for example, suggests moonlighting as a way of earning more income. Check out the "Investing and You" section for particularly interesting content.
The SEC is the regulatory "watchdog" of the stock markets in the U.S. Their "Learn About Investing" section offers pertinent information about the technical aspects of investing, including the 3-day settlement cycle, how to get information about your broker, and other important (but technical) stuff not discussed in this series.
The Options Institute's online learning center has one of the best education packages on the Web for learning about option trading. We'll be talking about options later on in the series, but if you are keen to get started, check it out now.
Investment Information Sites
Investment information sites abound. I've tried to keep this list to the very best. If you're a novice, you might want to try each of them out, then use the one you like the best. They've all got pretty much the same stuff.
What you'd expect from the "yahoo" of investment sites. Here, you can search any company by ticker symbol and obtain stock charts, detailed stock information, press releases, broker recommendations, and even a chat group discussing that company. This isn't the most complete site in terms of what it offers, but it is the most consistently accurate and up to date.
The Stockgroup "smallcapcenter" offers everything Yahoo offers, and more. Lots of content (including articles about news, companies, and industries) and in-depth information about individual companies using an easy-to-navigate tab system. This site will keep track of your portfolio, sell you analyst reports, and link you directly to a company's SEC filings on EDGAR. This is a great site. And Canadian, too!
The Motley Fool was one of the first good investment sites on the Net. It remains a great source of investment and stock market advice and tips. Their chat sites are probably the most frequented, and the site is designed for maximum customization. Most of the sections require registration before you can use them, but this site's popularity indicates that registration might be worthwhile.
We discussed this site already in the Investment Education section, but it's worth mentioning again here. Tons of content featuring well written, in-depth analyses. You might want to come back to this site after you've been investing a while--a lot of the language and analysis is geared to the seasoned investor.
Both CBS and CNN have brought their financial news prowess to the Net, and both have published excellent sites. Again, lots of content, news, and analysis that will get you well on your way. Really, with these sites, like all other subject-specific content sites, find a site you like to navigate, or a site where you like the content, and keep going back.
Well, what we've given you here should keep you busy until next month, when we'll discuss bonds. We'll learn the difference between a stock and a bond, why you'd invest in a bond, and how the bond markets work. So stay tuned.