Investing Tools

Investing Tools

Brokerage Account

In order to start investing, the first thing you need is a brokerage account. I have my personal account in IBI, which is an investment firm in Israel. If you look for one in the United States, I recommend using Merrill Edge. I admit that I only had a short experience with the firm, as they require that I live in the States in order to have an account with them. Nevertheless, they offer some great features that made me want to be their customer:

  1. Bank of America is the owner of Merrill Lynch and Merrill Edge. You have the protection of the SIPC as you have with any other major brokerage company. Yet, I believe that it is smart to put your money in a stable firm, that has the lower chances of failing. Bank of America is a SIFI (Systematically Important Financial Institution), and a too big to fail bank. The bank is going through a stress test by the Fed every year. Having your investment account with a company that is less likely to fail is an advantage.
  2. They will take care of everything for you. They will transfer all your securities from you current account. They will also refund the commissions that you might had to pay your previous brokerage for the transfer. They will also give you up to $600 extra cash if you transfer more than $20,000.
  3. Merrill Edge actually allows you to trade for free if your account value is higher than $50,000. By enrolling to the Bank of America Preferred Rewards program, you will have 30- 100 free stock trades every month. You will also get better interest rate in your checking account and more attractive loans.
  4. Merrill Edge also gives you access to research reports by S&P, Morningstar and Merrill Lynch.

Financial News

My favorite financial news website is Yahoo! Finance. The site is very convenient, concentrating all the information I need. It includes general financial news, stock quotes and option prices. Another useful website is Google Finance, which is pretty similar to Yahoo, but I find more convenient when I am looking for securities that are not traded in the United States.

Dividend Tracking

I use Nasdaq when I want to see the dividend history of a company. It offers a simple list of dates and dividend payments, and it is very easy to see growth or other changes in the dividend amount paid to investors. Nasdaq also gives a lot of information regarding the stock itself from financial metrics to insider movements.

The greatest tool for tracking dividends is the famous dividend champion list by David Fish. You will find there every company that raised dividends for more than five years. The list contains a lot of information from valuation metrics to dividend growth pace. It is probably the single most useful tool in the arsenal of the dividend growth investor.

Stock Analysis and Ideas

Different blogs are a great way for finding new investment ideas and analysis. Different investors are looking for different investments, and by being open minded you can always learn and gain more knowledge. I started looking at stock options after reading about stock strategies in a blog. Since then, I have devised my own strategy that serves me well so far.

Seeking Alpha is another great source for information. By creating your own watch list, you will get real time information about the stock you follow. You will track their earnings and dividends as well as any new information regarding the companies. You will also be able to read countless of ideas about almost any stock. It will help you doing your own research, and taking your decision on whether you would like to invest in a stock or not.

Eventually, you should be able to analyze the stock by yourself. I always make my own analysis, even after I read other writers. I read the analysis by S&P, Morningstar and other writers, and then I make my own research. Sometimes it requires very thorough analysis, and sometimes I get enough information from different sources, and I only need to look for some additional information. You should always read and study, and if you are not confident with your analysis, read more books and practice.