New Rules of Investing

Top 5 Investment Sites

Yahoo Finance is the 800 lb gorilla in best investment sites.  Yahoo essentially democratized financial information.  While not the first to do so, Yahoo made it easy for investors to study companies’ balance sheets and income statements.
As Reg FD leveled the investing playing field by prohibiting selective disclosures, new sites have arisen that provide tremendous value in the research process.  These best investment sites, when used properly, can mean the difference between profit and loss and between big gains and little gains.
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1. Expert Community

Expert Communities are comprised of groups of people used to conduct professional research.  We’ve seen a gaggle of new financial sites launched that leverage the stock picks of both professionals and individuals with stellar performance.  These sites plug in to users’ trading accounts to accurately represent performance.  Other users can, in turn, subscribe to top performers and track their trading activity.
Top Sites: Covestor, Kaching

2. Piggybacking the Pros

Created by a professional investor and analyst, James Altucher, this site follows portfolio moves of mutual fund and hedge fund managers.  Investors can search for a fund manager and see all the positions held by this investor reported to the SEC.  Users can also search by stock to monitor which professional investors are buying and selling it.
Top Sites: Alpha Clone, Stockpickr, GuruFocus

3. Long Tail Investment Opinion

What began as the mouthpiece of an ex-investment bank analyst blossomed into a full-fledged media company.  SeekingAlpha, as an editorial-driven blog aggregator, actually helped to seed the industry with new analyst-bloggers.  While it’s easy and cheap to begin publishing analysis to the Web, it’s not easy to get your analysis noticed.  SeekingAlpha gave these new power-brokers a soapbox.  SeekingAlpha essentially harvests the research from financial bloggers to provide coverage of the long tail of stocks and currently covers thousands of stocks.
Top Sites: SeekingAlpha

4. Grinding the Rumor Mill

Financial news flows are the waves on which stocks ride.  Rumors dribbled out into the market can have major affects on the movement of stock prices.  Tapping into the whispered expectations for a firm gives investors a view of what Wall Street is prognosticating for a stock.  The Street’s take on earnings reports helps give us insight into interpretation of data.  Briefing.com has uniquely designed services for individual investors and professional traders seeking live analysis of important news events of the day, with insight on what they mean for the market or individual securities
Top Sites: Briefing.com, Fly on the Wall

5. Screening 2.0

Professional investors use screens to filter stocks.  These screens consist of computer programs searching thousands and thousands of stocks for specific parameters.  Websites now provide preset screens that users can use to locate the next big one, without the use of expensive software and services. The Magic Formula, put forth by guru investor, Joel Greenblatt, was discussed in The Little Book That Beats the Market. Joel Greenblatt, Founder and Managing Partner at Gotham Capital put up average annualized returns of 40% for over 20 years.  His website provides a preset screen that lists numerous value stocks that pass.  Greenblatt recommends picking some of those and rebalancing every year.
Top Sites: MagicFormulaInvesting.com, Validea, Finviz, CNBC Pre-defined screens

6. Follow the Inside Moves

Lots of research has been done on the accuracy of tracking insider buying and selling.  Many insiders continue to sell stock at regular intervals and consequently, it becomes harder to track insider selling that differs in volume and frequency from these stock sale programs.  But it can be done and the results, according to the reseach, are good inidicators as to stock price movement.  Most of these services are premium services and subscription based.
Top sites: InsiderScore, StreetInsider, EDGAR
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