For Sifters as Well as Surfers: Web Helps Pick Stocks, Funds
ST. LOUIS — Information holds the key to successful investing, and information is what the Internet does best.
It has more sites than we can possibly list, or comprehensively rate, which sort through the info-clutter. We cover a few of them here. For more information, surf on over to you local bookstore, which probably sells upwards of a dozen books about investing through the Internet.
* Tracking: Morningstar (www.morningstar.net) of Chicago rates thousands of funds. Its Web site isn't the most sophisticated (Bloomberg Online, with both a free and a fee service, www.bloomberg.com, often rates high), but it's free and workable.
Let's say you want to add an international stock fund to your portfolio. Click on "Research" and "Fund Screens." Select the criteria (international stock funds and five-year average annualized return). When we looked, Morgan Stanley Institutional Global Equity A came out on top. You can further refine the screening - only Asian stock funds, for example, or one-year returns.
* Minimum investment: Yahoo, the popular Internet search engine, also maintains a good fund index (biz.yahoo.com/news) Unfortunately, the index shows, the Morgan Stanley fund requires a minimum $500,000! Too rich for us. Back to Morningstar, where Dean Witter European Growth B has the second-highest five-year annualized return. Yahoo tells us it requires only a $1,000 up front.
* Detail: Dean Witter, like many brokerage firms and mutual funds, has its own Web site (www.deanwitter.com) with a toll-free number to order a prospectus. But if you download the right software, you can get a prospectus online as well.
The online world is flush with stock-picking tools and advice.
* Strategies: If you don't know anything about investing, surf on over to the Motley Fool (www.fool.com). Its approach is irreverent, but the Fools (the title comes from Shakespeare) reveal some easy stock-picking strategies that have made some serious money. The site's "Thirteen Steps to Investing Foolishly" will get you thinking in new ways.
Another source for strategy ideas is Money magazine's site (www.money.com).
Of course, dozens of sites happily provide an inside scoop for a fee (www.thestreet.com is one of the best). But sample the free sites first to see if they whet your appetite.
* Performance criteria: OK, you've picked a strategy and you're ready to hunt for those stocks that meet your criteria. A few sites maintain stock-screening databases. One of the best free sites is Hoover's Online (www.hoovers.com), which allows users to select stocks using up to 20 performance criteria, such as the price-earnings ratio or one-year profit growth.
* Company research. With a list of stocks, it's time to get specific about those corporations.
Again, a great starting place is Hoover's, which offers concise corporate profiles. The profiles also link to the Securities and Exchange Commission's Edgar database (www.sec.gov), which contains official company reports required by the government. Hoover's offers more-detailed information for a small fee.
Don't forget to visit a company's own Web site, advises John Bajkowski, editor of the Computerized Investing newsletter for the American Association of Individual Investors. One way to get there, if it's listed on the New York Stock Exchange, is via the Big Board's site (www.nyse.com). A generic search engine such as Yahoo can do the trick, too.
The Nasdaq Stock Market (www.nasdaq.com) offers news and charts on its listed companies. The American Stock Exchange (www.amex.com) is more limited but includes company profiles.
Finally, use a search engine to find out how others describe the company.
* Quotes: Lots of sites offer free stock and mutual-fund quotes. Infoseek, Quote.Com, and Yahoo (www.infoseek.com, www.quote.com, and quote.yahoo.com), to name just three, provide quotes with a 20-minute delay. Datek Online (www.datek.com) offers them in real time, if you open an account.
* Trading: If you're ready to buy, decide what kind of broker you want: a full-service broker with an online presence, such as Dean Witter, a discount broker staffed with real people when you have a questions, such as Charles Schwab and Fidelity Investments (www.schwab.com and www.fidelity.com, or deep-discount brokers such as Datek and Ameritrade (www.ameritrade.com), with commissions of $10 or less for many trades.
Or maybe you want to track your stock picks without committing dollars just yet. Try DLJ Direct (www.dljdirect.com) and pick out your model portfolio.
This site is terrific and offers not just a model portfolio but also research, quotes, and personalized information - a nifty, free, fast package that helps you follow not just your portfolio but also the stock market in general.
* Staff writer David R. Francis contributed to this story.