More and more retail investors are starting to day trade. The unfortunate thing is that most of these traders end up losing a considerable amount if not all of what they’ve invested into the market.
Although there are a multitude of reasons for traders and investors losing money in the market, perhaps one of the most fundamental is a lack of understanding what they’re investing in and if they should be investing.
The worst part about it is that most if not all these investors are trying to understand the market by turning to sources such as finance twitter accounts and other online forums that don’t actually go through any type of real due diligence.
Luckily for these and investors and for you, there are some credible sources which you can use to understand the market and make money using. In this article we’re going to only cover a few, if you’re looking for a more in-depth or plentiful list you can check out modestmoney’s article about the 8 best stock research websites.
How to spot the difference between a credible and non-credible website
There are a couple of key attributes to look out for when looking at stock researching websites. The first and most prominent thing to be on the lookout for is if the site promises a return. No credible website will promise you positive returns on your website, no matter how big or accurate they are. Instead, they’ll point to how their suggestions have outperformed the market, and not be committal about the actual results.
The second which goes hand in hand with the first, is any site saying if you use them they’ll give you immediate and astronomical returns. Think things that double your money in one month. These sites, posts, or however else you’ve found them may have gotten lucky once and are now trying to sell that luck, rather than offer real substance.
The Motley Fool
One of the best websites for stock analysis that has been around for a very long time is The Motley Fool. Their premier paid service comes in the form of a Stock Advisor subscription which has historically performed far better than the market since its creation.
If you notice the phrasing there, that’s important. Their hand selected stocks have outperformed the market historically, but do not promise you the same results. There platform was built and is managed by trading professionals who outside of technical analysis understand the fundamentals of a stock which has led to consistent and profitable returns for their subscribers overall.
Their website lets you start to see what works and what doesn’t by seeing and understanding the what and why behind stock selections made by professionals. This can be extremely beneficial as you develop your own personal strategy.
Something unique about them is that The Motley Fool also practices selection transparency and publishes analyst opinions that are in opposition to their selection. Meaning you as an investor get to see both sides of the coin.
Although things like stock selection and research are part of their paid services, they also offer a variety of free resources targeted at new to intermediate investors. These can help you better understand the market from the get go, and should not be overlooked by anyone. Even the most professional traders could stand to benefit from the information.
Outside of The Motley Fool the Morningstar is one of the most useful stock trading websites. They have become the gold standard for professional stock analysis is done by Morningstar, which is now thankfully available to the average investor. They primarily focus on data-driven research and analytics, taking out human error from their market view.
Morningstar ensures all information you get to make investments is vetted, trustworthy, and accurate. They do this through their proprietary algorithmic approach and qualitative analysis from over 150 independent and unbiased industry experts.
Additionally, Morningstar offers screening tools, which allow you to pre-select some of your preferred stock qualities and Morningstar generates a research list to narrow the scope of your analysis. This makes it even easier to see which stocks are worth investing in immediately.
The full research suite from Morningstar requires a subscription, but a free plan can be used to see what they have to offer before making a purchase.
Which one should I use
If you’re just starting out in investing Morningstar can be a bit overwhelming however, it allows you to create your own strategy and advises based off that. This is something that The Motley Fool doesn’t offer.
However, if you’re looking to get started quickly and want advice that has a proven track record and doesn’t require a lot of studying on your part than The Motely Fool is probably a good choice for you.
In either case bolstering your financial knowledge is important. For that there are additional tools such as stock screeners and newsletters also available online. If you’re interested in finding out about the 5 best stock screeners currently available or about the 10 best newsletters to gain an edge in trading you can click on their respective links.