Stock screeners are tools that let you sort through mounds of information and find companies that meet characteristics you outline.
This process will save you hours of work and, best of all, you can access good stock screens on the Internet for free.
Screens Save Time
Beyond the time savings, stock screens help you with another important part of your investing strategy. By using screens to create short lists of stocks for further consideration, you systematically build your portfolio, rather than chase whatever hot stock captures your attention at the moment.It is too easy for many investors to purchase stocks in a haphazard manner without regard to diversification or any disciplined approach.
There are many ways investors hear about “good” stocks to buy and most of them end in disaster. A friend’s or co-worker’s hot tip usually ends up being yesterday’s hot tip.
Hot Stock Tips
If the stock was a good buy yesterday, it’s not one today because the price has gone through the roof. In some cases, the tip is just information passed on from another source that you don’t know and have no idea what their motivation might be in encouraging people to buy.Companies in the news will often catch an investor’s eye; unfortunately, it will also catch the eye of thousands of other investors. Your find may soon become a price balloon just waiting to pop.
I have another article that explains Stock Screen Basics.
Conclusion
Try your hand at some basic screens and see what power it gives you. Think about using screens to help you construct a thoughtful portfolio built on well-researched companies.Stories in this Series
Stock Screening Basics
You Should be Using Stock Screens
Characteristics of a Good Stock Screen
Don't Let Stock Screens Cloud Your Judgment
Stock Screens for All Investors
Stock Screening Tools You May Want to Consider
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