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New tools to supercharge your portfolio: Analytical software and websites have become increasingly important for careful monitoring and rebalancing of your portfolio by David Stevenson
Over the past decade, we’ve seen an absolute revolution in the information and portfolio analytics available to private investors. You can now get services that are really just one step below that of a Bloomberg terminal for a few hundred pounds a year, while free services such as Yahoo Finance and Citywire will probably satisfy all but the most serious private investor.
Every year, though, new services are launched and this week I’ll draw attention to a new product that I think warrants further investigation: Aurora DIY Investing.
To understand why both might prove useful, let’s first break down what I think investors need from such software. The most obvious requirement is being able to manage your portfolio, keep an eye on any big moves in the price of a share or fund, and understand why that has happened.
For me, once you move beyond free portfolio tools like Yahoo Finance you only have two choices: Stockopedia.com, which starts at £25 a month (though costs an extra £20 to include US stocks), and SharePad, which starts at £30 a month. (SharePad also has a software-based service for PCs only called ShareScopePlus which costs £55 a month.) Both are honestly superb and I don’t think you’ll go far wrong using either. I use SharePad regularly to keep an eye on my portfolio, but I’ve also used Stockopedia in the past and been very happy.
But portfolio monitoring is only part of the solution. You also need to be able to research new stocks and funds. Stockopedia emerged more out of a stock-screening background whereas SharePad was traditionally more focused on technical analysis and share price monitoring. Both have now converged on each other’s core focus and offer very powerful tools to screen down through a market and then identify a stock.
How to screen for stocks?
This brings me nicely to a new service, Aurora DIY. It is built on a powerful stock- and fund-screening service based out of Switzerland called TheScreener, which is used by a large number of big institutions. Aurora’s price point is radically lower than rivals with its main monthly service costing around £11 a month. It’s also a very different proposition.
Aurora starts from the premise that it’s all good and well to have amazing tools to screen through thousands of stocks and funds, but all these tools are pretty useless unless you have a good idea of which measures are valuable.
Stockopedia was very much a pioneer in this space – borrowing on the approach pioneered by Value Line in the US – by making explicit use of established stock screening systems based on curated academic research. But these screens have multiplied over time and there are now dozens of screens based on all sorts of measures ranging from price momentum through to value. Pity the poor private investor forced to choose which screening methodology to use!
This is where Aurora comes in. Its developers have used a series of respected and widely used measures to come up with a composite scorecard or dashboard for each stock or fund. These measures range from price momentum and volatility risk to fundamental measures based around the balance sheet and earnings growth. Using this dashboard approach, the platform then in effect combines all the measures to come up with a global evaluation which also involves a stars-based approach to risk.
In simple terms, you could select a geography – say, the UK – and search for the stocks with the highest scores. You’ll end up with a shortlist of stocks which you can then research in greater detail by going to the relevant stock, sector or fund page. To take an example, let’s say you use the Aurora system to only identify UK large-cap stocks, with the system’s top evaluation and the highest number of stars. In this search, you end up with two stocks: WPP and BP. You can instantly see their long-term average price to earnings ratio and expected long term earnings growth. Expanding that search to ‘mid caps’ as well, we have a longer list of eight stocks which includes Centrica, Inchcape and Direct Line.
If I had to pick holes in the system, I’d say that some terms used to describe the key measures and the ensuing explanation behind them are a bit woolly. But once you dig around the glossary, you’ll understand that the measures used are actually very mainstream. Crucially, the metrics are properly global in scale, spanning the key developed world markets.
What’s useful about this new service, apart from its lower cost, is the way it guides you to a shortlist of stocks and funds which you can then analyse in more detail.
Are they as powerful as SharePad and Stockpedia? No. But a less experienced investor might find Aurora’s tools more useful as part of a guided decision-making approach and they might also appreciate the cheaper price point.1
Thursday, November 17th 2022 – 6:00 PM (GMT)
Webinar: Become a confident Investor with Aurora DIY Investing
Learn how to discover winning investment ideas; join Eyal Perry, the founder of Aurora DIY Investing, as he explains how Aurora can support DIYs to discover winning stocks & funds Ideas in a more consistent, professional, and time-saving investment process.
1 – First published on Citywire Funds Insider January 2022