How to research stocks like a pro

Black Enterprise, August, 1996 by Juliette Fairley, Tariq K. Muhammad

Well organized and easy to use, AOL updates its company data monthly. In addition, the online service recently included the ability to create multiple investment portfolios, thus allowing investors to create fictitious and actual portfolios to track stock performance.

Most other online services have similar offerings, although some charge an added fee for the privilege. For example, AOL includes these services in its basic hourly rate. Of course, it costs extra to actually trade online, which is done through PC Financial Network (available on AOL or Prodigy). However, the information that can be unearthed in the many online sites can be just as useful for traders who buy stocks and mutual funds the old-fashioned way--through a broker.

There is even some old-fashioned printed material that will help the investor of the 21st century make the most of the resources available online. The Individual Investor's Guide to Computerized Investing, from the American Association of Individual Investors, offers an overview of investing, investment software and information services. It also has a companion CD-ROM that contains software demos and comparison tables covering software products and database services. It retails for $19.95 to nonmembers of the association (800-428-2244). The AAII Web site (www.aaii.org) is also a helpful resource.

Investor's Guide to the Net by Paul B. Farrell (John Wiley & Sons; $24.95) also provides useful information to the online investor. This well-organized guide steers you to investor-friendly places in cyberspace by supplying Web addresses, maps of major online investment sites and more.

Searching for information on the Internet can be a sticky proposition, unless you know where to look. There are numerous Web sites offering free stock quotes (www.pcquote.com). In general, these sites offer quotes that are delayed at least 15 minutes, offering little help for the investor seeking real-time data. For that you'll have to pay. Fees for real-time quote services are generally in the range of $10 to $20 per month, a small price to pay for staying on top of your investments.

Investment newsgroups are free, but the information you'll gather there is hardly reliable. These newsgroups enable sharing of investment strategies and stock picks, but the information should be viewed with as much scrutiny as possible. Remember, newsgroups are unregulated and are as subject to misinformation as the neighborhood rumor mill. A good place to start on the newsgroup grapevine is alt.misc.invest.stocks.

Historical company research and corporate filings are the best way to investigate any company, and a good bet in helping to make the right investment decisions. SEC Edgar (www.sec.gov) provides company data from corporate SEC filings.

The Financial Data Finder (www.cob.ohio-state.edu/dept/fin/osudata.htm) is an excellent resource for finding investment information. It contains hundreds of links to investment-related Web sites, directing you to sites providing company information, stock analysis, leading economic indices, data on exchanges throughout the world (including Australia, Canada and Japan) and much more. It is an invaluable site for investment research.