Every investor is different.
That’s not meant as a profound philosophical proposition. It’s a statement of fact. No matter how closely your income, family status, and lifestyle line up with your neighbors’, it’s very likely your fiscal positions differ considerably.
It’s just as likely your fiscal philosophy — how you think about and use cash and credit — differs from your neighbor’s. Combined with the innate and acquired personality traits that make you who you are, these differences inform your investor personality. Your tolerance for investment risk, long-term investing objectives, inclination to socially responsible investing strategies, and more all add up to set you apart from everyone else in the market.
Your investment portfolio’s composition no doubt reflects your unique investor personality, even if it’s broadly similar to portfolios owned by investors with similar time horizons, personal values, and risk tolerance scores. But that doesn’t mean you can’t use the same investing tools as peers whose approaches differ from your own.
Online Tools All Investors Should Use
Whether you’re a green-eared first-timer or a seasoned stock-picking pro, an index investing devotee or ultra-active day trader, each of these tools deserves a place in your investor toolkit.
1. Investor Education Tools
You don’t need a broker’s license or graduate degree in finance to build a balanced portfolio tailored to your unique investing objectives, goals, and risk tolerance. But you shouldn’t intentionally fly blind into the market, either.
Before you purchase your first stock, ETF, or mutual fund, spend some time building a sound fiscal knowledge base. Use free, reputable investor education tools and resources to learn or refresh your knowledge of basic financial concepts and investing principles.
In eras past, you’d need to spend hours in the stacks at your local library — and perhaps make the journey to a more specialized hub, like a university library, to really get into the weeds. Today, you shouldn’t have to leave your home.
These all-digital resources may help you polish up your general investing knowledge and savvy while equipping you to recognize and resist potential scams:
- Investor.gov. Investor.gov is a service of the U.S. Securities and Exchange Commission. Its sole mission is to provide unvarnished guidance to retail investors. Use it to research investment advisers and learn more about common investing fees, investment products, investing objectives, and avoiding financial fraud.
- Investopedia. As the name implies, Investopedia is an evergreen, information-rich reference tool designed to boost investors’ fiscal vocabulary. Use it to look up definitions for common and not-so-common investing terms.
These all-digital resources offer insights about markets, sectors, and companies. Even before you commit real money to your portfolio, use them to increase your general investing IQ and improve your financial reading comprehension. Market analysis isn’t beach reading, after all.
- Atom Finance. Atom Finance is a powerful research platform with a paid and premium version. The free version features seamless brokerage integration, institutional-quality news and analysis, easy-to-search SEC filings, market commentary, event transcripts, historical company financials, and more. The paid version, Atom+, adds pre- and post-earnings commentary, price change explanations, premium equity research commentary, and in-depth explanations of corporate actions. Atom+ is in waitlist-only mode as of April 2020.
- The Motley Fool. The Motley Fool is another information-rich resource for investors of all experience levels. Novice investors should start at the “How to Invest” tab, which has in-depth primers on investing for retirement, options trading, and the differences between mutual funds and ETFs, among other deep dives.
- Seeking Alpha. Seeking Alpha aggregates financial news and analysis drawn from wire services, media partners, and — most importantly — Seeking Alpha contributors, many of whom are licensed financial professionals or industry experts. Seeking Alpha has plenty of detail-rich, expert-level content, but there’s also a lot of straight news and high-level analysis for novices hoping to boost their market knowledge.
- Benzinga. Like Seeking Alpha, Benzinga is an energetic financial news and analysis aggregator. It also has a lot of sector- and instrument-specific content, including advanced realms like forex and cryptocurrency. Benzinga is a great place for novice and intermediate investors to increase their market IQ, general comfort level with investment analysis, and information synthesis skills (not every piece of advice you’ll find here — or at Seeking Alpha and the Motley Fool, for that matter — is worth pursuing).
2. Premium Market Research and Analysis Resources
In a world awash in market insights and analysis, is investing content ever worth its sticker price?
The short answer is yes. And, truth be told, curious investors rarely pay sticker price, at least not to start.
Some of the most popular paid market research and analysis products are premium extensions of financial outlets with ample free content, like Motley Fool and Seeking Alpha. These resources aren’t cheap, so it’s up to you to assess their value. Fortunately, free or discounted introductory promotions are extremely common. Take advantage of that upfront break, then reassess when the price jumps.
- Motley Fool Stock Advisor. Motley Fool Stock Advisor is a useful stock tip sheet from the founders of Motley Fool, who’ve more than proven their market mettle. The undiscounted price is $199, but a long-running introductory offer slashes the sticker price by half. For more information, read our Motley Fool Stock Advisor review.
- Motley Fool Rule Breakers. Also from Motley Fool’s founders, Motley Fool Rule Breakers is another tip sheet geared toward growth and small-cap stocks. There’s little overlap with Stock Advisor, and the sticker price is $299.
- TIM ALERTS. TIM ALERTS is appropriate for sophisticated investors seeking exposure to stocks priced under $5 per share. At about $75 per month, it’s not cheap, but investors who can consistently implement its recommendations (and have sufficient capital) may find it useful.
- Seeking Alpha Premium. At about $20 per month when billed annually or $30 per month when billed monthly, Seeking Alpha Premium is one of two paid Seeking Alpha subscription plans. The other, Seeking Alpha PRO+, is far too expensive for the typical retail investor. Still, Premium is a big improvement on Seeking Alpha’s free version, with fewer ads, dividend scoring and forecasts, and more information about Seeking Alpha contributors (which may help you tune out less-reliable analysts).
- Tradespoon Trade Intelligence Platform. The Tradespoon Trade Intelligence Platform has a vast array of tools and resources for serious investors. Highlights include trading ideas, performance and momentum forecasting tools, portfolio analysis tools, and a virtual trading tool that lets you test market strategies without risk of loss. Depending on your package, Tradespoon costs up to $125 per month when billed annually or about $200 per month when billed monthly.
This isn’t an exhaustive list of the best premium market research and analysis resources. Read more about these and other products in our roundup of the best stock market investment news, research, and analysis resources.
3. Reports From Reputable Rating and Research Agencies
As a passive consumer of financial advertising, you’re used to hearing phrases like “Lipper 10-year average” out of context. It’s worth your time to find out what these cryptic terms really mean.
If you have a brokerage account, you likely have access to a wealth of reports and research from authorities like Morningstar and Standard & Poors (S&P), including content not available to nonpaying members of the general public.
If you don’t yet have a brokerage account, you can still access a great deal of ungated, professional-grade content directly from these sources — and more if you’re willing to pay a monthly or annual membership. Your local library, university, or continuing education center may have premium memberships you can use for free.
- Morningstar Premium. Morningstar Premium draws on the expert analysis of more than 150 in-house experts. For $199 per year, Morningstar Premium delivers in-depth, company- and industry-specific content you won’t find anywhere else. Your subscription also includes investment tracking and monitoring tools, which may be useful if you don’t yet have a brokerage account.
- Kiplinger Mutual Fund Rankings. Kiplinger updates its top mutual funds rankings annually. You’ll find the cream of the crop in its Top-Performing Mutual Funds by Category lists.
- Lipper Leaders. Lipper Leaders ranks funds by return (total and consistent over time), capital preservation, expenses, and tax efficiency.
- MAXfunds.com. MAXfunds.com is an independent mutual fund analysis platform that’s great for investors interested in objective comparisons of mutual funds and fund managers. It’s free to use, though MAXfunds.com pushes its fee-only investment advisory service on researchers.
4. A Risk Tolerance Assessment
Can you put your unique investor personality into words? If not, you’re certainly not alone. Fortunately, investor personalities are not unknowable. Getting a better handle on yours is as easy as completing a risk tolerance questionnaire.
A risk tolerance questionnaire asks straightforward questions about your relationship with money and your tolerance for fiscal uncertainty. The result is a measure of your tolerance for market risk , or the inevitable ups and downs of the equity markets. This measure plays an important role in determining your ideal portfolio allocation — in other words, the mix of equities and sectors, fixed-income instruments, cash, and other investments.
Your ideal portfolio allocation will change over time. For example, you’ll want to invest more conservatively as you approach the goals or events for which you’re investing, such as a child’s college education or your retirement. But you can’t create an accurate road map for future portfolio changes without an accurate risk tolerance benchmark at the outset.
There’s no need to pay for a risk tolerance questionnaire. If you work with a human financial adviser, they’ll have you complete their preferred questionnaire at the start of your relationship. If you’re self-directed, try these questionnaires from Vanguard (no account required) or the University of Missouri (which isn’t beholden to for-profit interests).
5. A Retirement Income Calculator
For most young investors, retirement is an abstraction — a distant prospect not even on the horizon.
But its distance doesn’t make retirement any less real. Fate willing, you’ll devote your later years to something other than climbing the corporate ladder. You’ll need to be prepared to get by on income generated by your retirement portfolio, plus Social Security (assuming it’s still solvent by the time you retire) and any pension payments your past employers are generous enough to provide.
Finding a free retirement calculator is as easy as conducting a Google search.Try this calculator from Vanguard, which has some extra guidance on how to determine how much income you’ll actually need in retirement. This one from Prudential has a lot of detail about the factors that may affect your actual retirement income.
6. A Fee Analyzer
It’s a time-consuming slog to calculate the management fees and expenses charged by the funds in your tax-advantaged investment accounts, such as your employer-sponsored 401(k), your health savings account (HSA), or your 529 education savings plan. Actually comparing them to comparable alternatives is downright impractical for investors with lives of their own.
But you have a right to know whether you’re paying too much. Enter the handy investment fee analyzer, which does the hard work of comparing the fees and expenses charged the funds held in your tax-advantaged investment accounts and the party responsible for managing those investments against suitable alternatives.
There is a catch. Many fee analyzers are tied to brokerages or robo-advisor platforms with a clear interest in the outcome of the analysis: to convince investors to open accounts in-house and roll over investments presently held with the competition. The analyzers from Personal Capital and TD Ameritrade are good examples of what to expect from self-interested fee analyses.
Know this going in and you’ll be fine. Rather than act on the recommendation of the first fee analyzer you use, conduct multiple analyses using different analysis tools, then step back and decide whether and where it makes sense to move your money.
Pro tip: If you have an IRA or a 401(k), you can also sign up for a free analysis from Blooom. They’ll look into the fees you’re paying, plus they’ll make sure your asset allocation matches your risk tolerance.
7. A Free or Cheap Financial Planning Tool
There are many benefits of working with a Certified Financial Planner, but it’s not cheap. Before you spend a low-four-figure sum on a one-off financial planning project, use a free or cheap budgeting and financial planning platform to get a handle on your personal finances and pave the way for a long-term investment strategy. Personal Capital and Mint are both great — just be aware that Personal Capital’s free financial planning services are designed to funnel users into its investment advisory platform, its real moneymaker.
Your financial planning tool should have the capacity to link to all of your financial accounts, displaying your entire fiscal life in a single dashboard. It should also:
- Have robust budgeting tools that allow you to categorize and track your spending at a granular level
- Allow you to analyze your cash flow and ensure you’re spending less than you earn
- Suggest changes that may augment your cash flow
- Allow you to create goal-oriented savings plans, the building blocks of a broader financial plan
- Be able to track and alert you to upcoming bill payments
- Be able to track investments held in an external brokerage account
- Offer complimentary credit score access
8. A Discount Brokerage Account
If you’re new to self-directed investing, you probably don’t have a preferred discount brokerage. Perhaps you’re overwhelmed by the sheer variety of brokerages competing for your investment dollars.
It’s worth the effort to find a discount brokerage that meets your needs. That’s true even if you keep the bulk of your investable assets in an employer-sponsored 401(k) account whose custodian you can’t choose and if you’re already using a robo-advisor or hybrid platform like Betterment. As your wealth grows, you’ll have more leeway to invest it in a taxable, self-directed account at a discount brokerage.
As a novice or intermediate investor, a discount brokerage is an ideal place to build a balanced portfolio consistent with your investing objectives, long-term goals, risk tolerance, and personal values. Look for a brokerage with:
- Low Account Minimums. Most discounters have low account opening minimums or none at all — ideal for low-asset investors seeking a toehold in the market. Ally Invest is a great example.
- Low or No Trading Commissions. Commission-free stock and ETF trading are increasingly common. Schwab was the first major discount brokerage to eliminate commissions for most equity trades, but others like M1 Finance and Robinhood have followed.
- Low or No Fund Transaction Fees. Pay attention to the number and variety of transaction fee-free mutual funds and ETFs. Portfolios composed wholly or primarily of such discount instruments may have lower net costs (and better long-term performance after fees and expenses).
- Low or No Management Fees. Hands-off investors eager to delegate portfolio-building to human or algorithmic experts need to mind investment management fees charged by the brokerage itself. On algorithm-driven platforms, look for fees under 0.50% of assets under management (AUM, annualized). Some deep discounters, like Ally Invest, charge no management fees at all.
- Automatic Rebalancing. Over time, market movements may upset the portfolio component weighting outlined in your investment plan, necessitating a flurry of transactions to restore the original weighting. Manual rebalancing is incredibly time-consuming, but most robo-advisor platforms and many hybrid investment platforms offer free, automatic rebalancing at set intervals.
More experienced investors may need additional features and capabilities, such as margin trading accounts and access to advanced instruments like options, forex, and cryptocurrencies. But your first discount brokerage probably doesn’t need extra bells and whistles.
9. An Investment Screener
If you can purchase individual stocks and funds through your self-directed brokerage account, it most likely has an investment screener tool.
If you don’t yet have a brokerage account, perhaps because you’re still using a mock portfolio to refine your investing strategies, use a third-party screener not tied to an investment house. Zacks has an effective, low-frills screener, while Yahoo! Finance’s vast array of investing tools includes a user-friendly option.
Every screener works a little differently, but look for one that includes:
- Key instrument details, such as dividend yield and price-to-earnings ratio
- Key fundamental metrics, such as return on equity
- Earnings details, including positive and negative surprises
- Granular sector and industry descriptors — for instance, breaking broad sectors like “telecommunications” into sub-industries like “pay-TV providers”
- Proprietary rankings from impartial third parties, such as S&P and Morningstar
- Proprietary scoring and analysis from impartial third parties — for instance, Zack’s proprietary Industry Rank, Value Score, Growth Score, and Momentum Score provide insights nonexperts might not glean from a price chart or balance sheet
- Analyst ratings and buy/sell/hold recommendations
Beyond these data points, look for a screener you find easy to use. As long as you’re not paying for a product you can get for free elsewhere (or as part of a paid service, such as access to a brokerage platform), there’s no wrong answer here.
A quarter-century ago, you’d be hard-pressed to find most of these tools in a recognizable form. Sure, the nascent Internet harbored rudimentary investor education resources, market analysis, and research reports. TV and radio was awash (and still is) in financial content, some of it insightful and some not so much. Publishing houses and print media cashed in big time on the public’s growing fascination with equity markets.
But mining these channels for insights you could actually apply to your investing activities was tedious and time-consuming. Today, retail investors are blessed with a wealth of educational material, strategic advice, and time-saving tools.
Managing this wealth of information is a challenge in its own right. Locating reliable resources to inform and guide your current and future investing and money management activities is more than half the battle.
As a retail investor, you’ll benefit from including at least one tool from each of these categories in your investing tool kit. In some cases, such as investor education and market research, more is better — you really can’t have too much information about the mechanics and strategy of investing. In other cases, such as cash management and brokerage accounts, one or two of each type may suffice.
Whatever you do, don’t feel limited by what’s on this list. If the recent past is any indication, new and novel investing tools are just around the corner.
How many of these investing tools do you use? Are you planning to begin using any others on this list?