Mark Ingebretsen writes a weekly column on trends in online investing for TheStreet.com. He is working on his second book recounting the rivalry between the New York Stock Exchange and the Nasdaq. It will be published by Random House in January 2002.
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Create a watch list.
With a watch list you can monitor a stock's daily performance before buying. Also, you can use that watch list as a base for doing fundamental research on the stock. Yahoo Finance! (http://finance.yahoo.com) allows you to do both. Many other financial web sites give you the same kind of fundamental information you'll find at Yahoo! Finance but Yahoo's pages load the fastest . And they let you explore SEC filings, options prices, recent analyst upgrades and downgrades.
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Find out what people are saying about the stock.
A web site called Validea.com (www.validea.com) tracks what financial reporters and analysts have had to say about your stock recently. Not only that, the site details the track record of each pundit. You can also ferret out opinions on a stock by searching the archives at the financial news site TheStreet.com (www.thestreet.com). The search window appears on the site's home page. For technology stocks, CNet (www.news.com) is especially helpful, since it leads to reviews of a company's products from a wide- ranging group of magazines, both general interest and technical.
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Get a second opinion.
Quicken.com (www.quicken.com), VectorVest (www.vectorvest.com) and ValuEngine (www.valuengine.com) all have free stock analysis software on their sites. Simply enter a ticker symbol and the number crunching software will give you an opinion on, for example, what the stock's fair value might be, or what its growth prospects are. Compare this information with what analysts have said about the stock.
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Analyze the stock's sector.
As much as 80 percent of a stock's movement can stem from movements by the sector as a whole. The web site ClearStation (www.clearstation.com/cgi-bin/Itechnicals) shows you how the stock's sector has been performing. Using a list of fundamental and technical indicators it compares the sector performance to its component stocks.
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Determine the trend.
Will the stock likely rise or fall in the near term? Using technical indicators the web site BuySellorHold (www.buysellorhold.com), gives you a quick read on the trend and points to short- term support and resistance levels.
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Know the risk of ownership.
At RiskGrades (www.riskgrades.com) you can simply enter a ticker symbol, specify a period - say, six months - and then view a graph of the stock's volatility as compared to the market. Another useful site called BigCharts (www.bigcharts.com) again lets you specify a period, and then see a chart detailing how the stock traded that week.
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Develop a plan.
At what point should you buy the stock? When would it be most advantageous to sell when factoring in such things as dividends , and tax consequences? The free calculators at FinanCenter.com (http://www.financenter.com) let you quickly perform calculations like these.
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Monitor your performance.
A web site called Gainskeeper.com (www.gainskeeper.com) will automatically track your cost basis in a stock, calculating the effect of dividends, splits , spin offs, etc. The site will also automatically generate a Schedule D used for reporting capital gains on a U.S. tax return. Fees for this service start at US$49 per year.
