There’s so many stocks out there. It’s can be a challenge to keep track of all of them. It’s actually nearly impossible, unless you have 40 hours a week to dedicate towards it. But if you are an average investor like the majority of us, then you need to be efficient with your time. You need to know which companies you want to keep an eye on, which companies you should start keeping an eye on and that will help you determine when to finally pull the trigger on a stock and open a position.
The easiest way to start learning about a wide variety of stocks is by watching the markets and looking at the trending stocks. Every day, take a look at the highest volume stocks for the day, biggest gainers/losers, etc. This will give you a quick snapshot of what happened that day and if you run across a company you like, you can add it to your watch list and keep track of it moving forward. Over the long run, you’ll begin to develop a longer list of companies you are interested in and can wait for the right time to invest it.
So, that’s the typical way to start learning about and finding stocks. I also want to show you guys a different way that many people probably don’t know about.
As many of my readers may know, I have an investment account with the brokerage firm called Motif Invest (affiliate link for $150 when you sign up). Essentially, they have a platform where you buy motifs, which are collections of 10 to 20 stocks that follow a central theme. You pay $9.95 per trade and the funds get invested across all the stocks in your motif. You can read my entire review here.
Beyond using my Motif Investing account as a way to purchase actual stocks, I also use them to learn about different companies. They’re probably one of the greatest research tools out there.
On their explore page, they list out all the different types of motif’s they offer. Each one represents a different industry, sector, theme, business type, etc. So, I use these pre built motifs to learn about specific types of business and find stocks in that theme that I have never heard of.
So let’s walk through an example.
Step 1: Sort Order
Personally, I like to buy the dips. What this means, essentially, is that when an industry has fallen for a few months, we reach a point where the selling has tapered off and the price of the stock is now lower than than the actual value of the company. Since the stock is now worth more than what they’re trading at, it’s a perfect time to buy.
So, I usually begin my research by sorting the entire list of motifs by ‘one month return’ and then sort ‘low to high’.
Step 2: Find a Industry to Research
Once you have your sort order set, look for a motif that sounds interesting. This is where it gets interesting. There are literally hundreds of motifs, so the options are endless.You can literally pick anything you want to learn about.
Once you’ve found one you like, click into it.
Step 3: Review The Motif
Once you’re in the motif, you’ll see a long list stocks that come in that motif. From here, you can pick one’s you’ve never heard of and research them further. Review the fundamentals, dividend payouts, read some articles, etc and learn about the company.
Step 4: Build a Watchlist
Look through enough motifs and you’ll eventually find a few stocks that seem like good investment opportunities. At this point, you can add them to your watchlist and open a position when the time seems right.
Well, that’s my process! Try it out. I highly recommend using Motif Investing as a research tool as well as an investing firm. Using this method you can learn about a lot of companies very quickly. The best part is that you’ll run across a lot of stocks that you have probably never heard of before. It’s a very quick and dirty way to expand your knowledge of all the different types of companies that are out there.