Finding and investing in good stocks is not always easy. Picking the best stocks is like finding a needle in a haystack because there are so many companies and stocks to choose from. However, using a premium or free stock screener significantly simplifies the task. Though, in order to make the best use of the stock screener, you must understand how to fully utilize the stock screener.
Also note that there are numerous best free stock screeners available on the market, including premium as well as free. But, what is most important is your understanding and ability to identify the best stocks to invest in.
Let’s learn about how to find investment ideas using stock screeners.
How to Find Investment Ideas Using Free Stock Screeners?
When it comes to finding the best investment stocks, stock screeners can be a fantastic tool. It can be used to find potential stocks by cloning the portfolios of star managers, developing a custom screen, conducting market research, and so on. However, it’s worth mentioning that these tips and methods are mostly applicable when using the best free stock screener. You can use additional methods in other situations.
Let’s take a closer look at each of these techniques.
- Cloning Star Managers’ Portfolio
One of the most well-known and practical ways of investing is to clone the portfolio of an investor we admire. Even Warren Buffet, the world’s most successful investor, admitted in an interview that he used to copy many of Ben Graham’s stock ideas in his early career.
Cloning a portfolio of a successful manager is always a simple and risk-free method. However, this does not imply that you should blindly follow your favorite investors. It’s reasonable to assume that you know why your favorite investor is investing in certain stocks. It is recommended that you do not buy those stocks if you do not understand the reason for their investment. Better, you understand about those stocks using the best free stock screener.
Also, clone or follow only those portfolios or Investor Managers who have a long-term investment strategy and extensive experience in the companies in which you intend to invest. Make sure to keep all of these minor but crucial details in mind when cloning star investor portfolios.
Let’s move on to the next method in our How to Find Investment Ideas Using Free Stock Screeners list– Custom Screen.
- Create a Custom Screen
Most of the best free stock screeners, such as Ziggma, have a feature that allows you to create a custom screen. A custom screen is essentially your own screener that includes stocks, options, mutual funds, and exchange-traded funds (ETFs) that you are interested in. The custom screen also includes a number of filters, such as ratings, fundamentals, and technical, to help you narrow down your options.
For example, you might be interested in investing in a specific industry. Let’s take the automobile industry as an example. Alternatively, you might be interested in investing in Nasdaq-listed auto stocks only. In such a case, you can use several filters in the stock screener to find your matches, such as Exchange, Industry type, Sub-industry type, and so on. This will provide you with the exact stocks you’re looking for.
You can create a custom screen for mutual funds in addition to stock screening. In conclusion, using the best free stock screener to create a custom screen is a good way to find potential investment stocks.
The next tip on our list of How to Find Investment Ideas Using Free Stock Screeners is– Market Research.
- Market Watch
To invest in potential stocks, along with the knowledge of the best free stock screener, you should also have a basic understanding of what is going on in the market or the industry you intend to invest in. It is necessary to have a basic knowledge of the equity you are investing in. You must keep yourself informed about the company you intend to invest in at all times.
For example, look for new products or services they’re launching or new partnerships or acquisitions they’re planning. This information will assist you in comprehending their future plans. Keep an eye out for government regulations and policies as well because state policy has the ability to alter the prospects of any industry or sector drastically.
Most of the best stock screeners also have an option to add a stock to a watch list. This feature enables you to add potential stocks to your watch list and invest in them at the appropriate time. Above all, before investing, carefully consider all factors such as investment objectives, risks, charges, and expenses.
Summary: Every new investor has the same question: “How to find investment ideas?” If you’re wondering the same thing, keep the methods mentioned above in mind: clone your favorite investor’s portfolio, market research, and create a custom screen. Also, keep in mind that all of these techniques are only applicable when using the best free stock screener. In other cases, you have the option of following other methods.
