In yesterday’s post, I wrote that doing due diligence on a particular stock is the best risk management strategy. If you can avoid making a bad investment decision from the very beginning, there is no need for further strategy to avoid losses.
Stock Equity Due Diligence
So how do you perform due diligence on stock trading on an exchange?
When I got started in investing there were hardly any tools out there to easily check the financials of a company. The internet provided a great deal of information but the information needed to be sliced and diced so that it could be distilled in an easy to read and understand format.
Over the past few years, I’ve come across some tools that may be beneficial for someone getting started in investing.
Fast Graphs
The first tool I like is from www.fastgraphs.com. The FastGraphs tools pulls together lots of information and distills it into a nice graphical form. The owner, Chuck Carnevale, has a nice blog page here but you can watch his YouTube channel to get an idea of the analysis possible.
Everything Money
A relative newcomer, Everything Money has one of the most impressive tools to analyze stocks but the team that created the tool also advocate for developing a process (due diligence) for analyzing an equity. Everything Money’s YouTube video are entertaining and informative.
Neither of the tools are free but I find them valuable for the information and service they provide and would recommend you have a look.
S&P 500
Of course, there is another option if you don’t want to be a stock picker and do analysis and that’s just to buy the S&P 500 index for the long term. The S&P 500 is endlessly vetted by armies of investment professionals and few investors actually beat the S&P 500 so that’s the “easy” button.