Finding Stocks & Tracking Performance: Portfolio Management 101
Overcoming the information overload
Happy Monday fam! The world remains crazy and difficult to predict, but nonetheless we hope you’re learning a little bit about the markets and starting to make some investment decisions.
We’re excited about this week’s post because we’re going to take a momentary break from the principles of investing and focus more on the practical side: how do you select stocks among the hundreds of options out there? how much should you buy at once? what’s the best way to keep track of your portfolio?
The good news is, it’s easier than ever these days because of a little something called the ~interwebs~. Whether you’re trying to find new stocks, selecting between a few options or simply tracking performance, there’s a plethora of user-friendly options for every need.
Finding Stocks & ETFs
We’ve talked a little bit about how you can evaluate stocks (or ETFs) in our previous posts, but many of our readers have told us they still aren’t entirely sure where to start the process. Everyone’s heard of Alibaba and Tesla and Apple, but where do you look if you want to expand beyond that?
If you’re interested in the economy and prefer to learn by osmosis, Bloomberg News, the Wall Street Journal and Barron’s are all great places to start. However, if you’re unlikely to dedicate much time to investing, “stock screeners” such as those offered by Yahoo! Finance (below) or MarketWatch can be useful tools. You can search for stocks based on any number of criteria e.g. P/E ratio, country, market capitalization (i.e. size), industry, dividend payouts, recent performance etc.
Similarly, check out a couple of ETF screeners (ETF.com, JustETF), to help you narrow down your options. You can shortlist funds by theme, assets under management (aka size), performance, sustainability score (known as ESG) etc. The choices are endless!
Once you have a list of 15-20 potentials, you can trim it further by looking up the latest news or simply sounding it out with your friends and family. Ultimately, investing in solid, trusted companies that are growing (and/or pay good dividends) is where you want to start out.
As you get more comfortable with the process, you’ll hopefully begin to notice companies whose products you personally use and start evaluating them with your investor hat on. Remember, you’re building a long-term portfolio, so you have the luxury of time to let everything compound over decades. Don’t let the initial complexity put you off from investing in your 20s - most people in hindsight would love to have started earlier.
Keeping Track of Your Investments
Let’s be real, very few of us dedicate the time to checking our investment accounts as often as we should… because life just gets in the way. Luckily for us, we’re living in 2020 and have the luxury of letting our smartphones do all the heavy lifting :}
If you have an iPhone, open up the Stocks app (it’s literally called that) and add all the stocks and ETFs you’ve invested in or want to keep an eye on. This app is super basic and really only lets you look at recent performance, but it’s a convenient way to see everything all in one place without other stuff complicating the picture.
Want to make it even easier for yourself? Download a stock-tracker app, say Yahoo! Finance, and add your portfolio in. Ps. Many online brokers let you sync your account automatically with these third party apps, so you can track performance without having to log in to your actual investment account.
Another benefit of these apps is the ability to set up alerts for when one of your holdings reaches a certain price or if there’s big news about the company, which makes it a lot easier to decide when to buy and sell.
Ultimately, it’s entirely your decision as to how involved you want to get with investing - what works for me might not necessarily work for you! The good news is, you can be pretty hands-off these days and outsource everything to technology. As long as you have a handle on the big picture (and an idea of how much you want to be putting in every month), don’t feel like you have to be a ~stonks god~ to succeed.
We hope this post has demystified the investment process a bit, because it’s really not as complicated as some people make it sound. Even if you’re just tracking a couple of stocks without intending to put money into them, the research and time you spend on this will only add to your experience - and come in handy whenever you’re ready to press that Buy button!
Note, these posts are intended as an educational resource and to encourage participation in the stock market. None of our opinions should be taken as investment advice, please speak to a professional for that :)