DIY Investing – hands across the ocean: Free stock screening tools

It’s safe to call it a trend: DIY investing continues to gain steam among everyday people as commissions drop, mobile accessibility improves and indexing to a benchmark is easier than ever. But one of the biggest drawbacks facing online investors and traders is the amount of time it can take to stay on top of the markets.

From managing your current holdings, to researching new ideas and staying on top of economic news, DIY investing can take a lot of time. Luckily, in today’s online world there are plenty of great tools to help you streamline your stock and ETF selection process and manage current holdings.

Personally, one of my favourite tools to save time with my investing research is using free online stock screeners like the one provided by FinViz.com. And while you can definitely use FinViz to scan for the best stocks to buy right now, it can also be a great way to stay on top of the market.

That’s because once you set up a FinViz stock screen, you can easily bookmark it for your future reference. Therefore, if you set up 3-5 stock screens and quickly check them each day, you can easily keep your finger on the pulse of the market in only a few minutes per day. Not bad, right?

So what stock screens should you set-up to be your market observer?

Well, it depends on your investing style, time horizon and other personal risk tolerance. But to help you get started I can show you what I do…

• Scan for ETFs making new 52-week highs: this is a great way to see which asset classes are being bid up by investors. If you prefer to buy undervalued securities, then you could also look at 52-week lows to see which ETFs might be forming a bottom. By watching how these lists change over time you can see what’s working and what’s not.
• Check in with the major market sectors: the FinViz groups tab and heatmap give an excellent view into the different market sectors. You can also see you these components have performed over various time frames, which helps understand which parts or the market are running hot (and over what timeframes).
• Stocks hitting new highs: Similar to what we discussed with ETFs above, by looking at the strongest stocks you can also see where pockets of opportunity are and how they’re changing over time. Plus, the number of results can also help you gauge the strength of the stock market overall. If you see hundreds of companies breaking out then it’s probably safe to assume you’re in a more bullish environment than if this screen is coming up empty. Depending on your investing preferences, you may also want to add a market capitalization or volume filter to help focus on the biggest stocks that are leading the market and attracting the most asset flows.

The great thing is, FinViz allows you to bookmark your stock screens to easily check them each day and see how things are changing. While this is quite straightforward I appreciate the initial setup may be a little bit cumbersome. In that case, you can also check out Stockcharts.com’s list of predefined technical scans. This is a great way to get the info you need even faster.

Or put another way, you can think of this kind of regular investing research as fishing with a net: casting out these screens is like laying down a net or a hunting trap. Instead of tending to a fishing pole all day, you can quickly look each evening to see what’s been caught! I find this approach helps me free up time and worry less when it comes to managing my investments on my own. I hope it can do the same for you too!