Online Investing Hacks

Hacks #1-6

Like fast-food meals, the scope of investing has gone super-sized. As an investor, you’re confronted with more and more types of investments, each with numerous options that usually require a magnifying glass to peruse the fine print. Then, having decided on the type of investment, you must choose from overwhelming numbers of individual investments—more than 10,000 publicly held companies and in excess of 14,000 mutual funds, for example. With the explosive growth of online services, even choosing a place to stash your cash has gone from a drive to your local bank to a nationwide search for the best savings rates. Investors are barraged with advertising for financial products; hot tips from friends typically aren’t so hot, and financial magazines and newsletters often omit the information you really want to know. So, how can you, as an independent investor, actually choose good investments that support your financial goals, and still have some fun and get some sleep? The answer is screening.

Screening means defining criteria for the financial product or investment you want, and filtering out the ones that don’t fill the bill. For example, if you’ve decided that you want to add a small-cap mutual fund to your portfolio, you want a manager with at least five years at the helm, and if you only have $1,000 to invest, a fund screen containing all these conditions pares the field from 14,000 funds down to about 100 funds. If you further filter the list to funds with less than ...