Some investors today stick solely to exchange-traded funds whose prices track action in the broader markets or particular industries. The mostly passive, hands-off style of investing that results does not always require staying up to date with every relevant detail.
Investors who stake out positions in particular stocks, though, need to be better attuned to what is happening with them. Because individual stocks can be volatile and even move contrary to the market or the shares of competitors, shareholders have to keep up with the latest developments if they are to trade them profitably.
Fortunately, there are some straightforward ways for investors to be sure of having access to all the relevant information at all times. Investors who stay attuned to the following five important sources of information can count on staying informed about their stocks.
1. Free Portfolio Trackers
There are dozens of sites and services today that make it easy for investors to track their stock portfolios precisely. Popular web destinations like Google Finance and Yahoo! Finance allow visitors to quickly set up basic watch lists and full-fledged portfolio trackers.
Simple watch lists are best for investors who do not plan to trade individual stocks frequently. Having instant access to a few select quotes can make it easier to decide when to buy or sell for investors who mostly focus on ETFs and the like.
More active investors who like to trade shares of individual stocks, though, will always be better off using comprehensive portfolio tracking tools. These services go deeper than mere watch lists to take issues like cost basis, gains, lot sizes, and trading dates into account.
Taking the time to set up an accurate portfolio tracker will help on a daily basis. That will make it easier to judge the overall performance of each particular stock, as well as how the various trades that went into a position have worked out.
Most of the leading portfolio trackers also put plenty of additional information at the fingertips of users. From the latest news and SEC filings to analysts' takes and historical performance, these links and snippets help investors stay informed.
2. Automatic Alerts
Many active investors regularly use limit orders that trigger when stocks they are interested in hit specified prices. Sometimes, though, it makes more sense to simply receive an alert when certain relevant conditions are met.
As with watch lists and portfolio trackers, there are now many free services that provide customizable stock alerts. Google, MSN, and Yahoo! all make it easy to set up email and SMS alerts based on stock price movements. In some cases, such systems are even integrated with the portfolio trackers that the same companies offer.
Brokers and specialized providers often go a step further by providing access to more configurable alert tools. In addition to stock price movements, these more advanced alerts can be customized based on factors like:
● Volume. Should the volume of trading in a stock vary much from the typical range, something significant will often be afoot. Setting up an automatic alert that will be issued when trading volume hits unusual levels will make it easier to react even if a stock's price remains fairly stable.
● Headlines. When a stock's symbol appears in a noteworthy story, the market will typically price in the news fairly quickly. Alerts that trigger on mentions in the news can still give investors more time to react.
● Indicators. Many stocks can be expected to move in tune with especially relevant economic and industrial indicators. Having alerts go off when these get updated will sometimes make it possible to get out ahead of the market.
● Regular updates. Not every automatic stock alert needs to focus on unpredictable information. Setting up regular, periodic alerts can provide helpful reminders to check up on the status of any stock in a portfolio.
3. Quarterly Filings and Earnings Calls
Most publicly traded companies are required by the SEC to file quarterly 10-Q reports. Many also use such occasions to communicate directly with investors and analysts, often to productive effect.
10-Q reports themselves range from being pedestrian and unremarkable to earth-shaking. In the latter case, reporters will normally be eager to break news about prominent companies whose 10-Q filings reveal unexpected details about recent legal proceedings, risk factors, securities sales, defaults on debt, and other SEC-enumerated developments.
Investors who have stakes in less visible stocks, though, occasionally end up uncovering such stories through their own perusal of 10-Q reports. As all such filings are publicly available at the SEC website, such discoveries should not be expected to remain private for long but can still be highly profitable, albeit in relatively rare cases.
Of greater interest to most investors will be the earnings calls that typically follow upon the filing of quarterly 10-Q reports. As might be expected, publishers like Yahoo! Finance and Kiplinger maintain calendars that list upcoming earnings reports and calls so investors can prepare.
Earnings calls sometimes prove to be the best way for analysts and involved investors to get answers out of companies' officers. On the other hand, CEOs, CFOs, and their subordinates tend to be both bound by various laws and advised by corporate counsel not to be especially forthcoming with their responses.
Most investors will therefore do fine to read the summaries of earnings reports and calls that are generally published by news outlets soon after the relevant information becomes available. Press releases that corporations put out on their own ahead of earnings calls can be informative, as well, when taken with a grain of salt.
4. Annual Reports
If quarterly reports and earnings calls help investors stay attuned to the near-term developments at companies they are interested in, annual reports provide longer-term perspective. Publicly traded companies have to file an annual 10-K report with the SEC that is mostly analogous to the quarterly 10-Q form. As with 10-Q filings, these can be accessed through the SEC's EDGAR database and can be anywhere from monumentally boring to entirely surprising.
Most companies also distribute annual reports to their shareholders that tend to be less formal and formulaic. Many investors look forward to these because they often contain statements about the current management's approach and plans for the future.
Whereas a 10-K filing will frequently be no more than a summary of the 10-Q forms that preceded it, an annual report to shareholders can be more revealing and descriptive. Once again, the annual reports of large companies virtually always give rise to stories in the media, making it easy to get caught up even for investors who miss the initial release.
Investors who own shares in smaller companies or are thinking about buying them will sometimes need to do some digging on their own. Some publicly traded companies still make the effort to send out printed copies of their annual reports to shareholders. In that case, a broker might end up forwarding the materials to an investor who owns shares at the corresponding moment.
More often, though, a visit to a corporation's website will bring up its most recent reports to shareholders. Failing that, a Google search with the company's name and the phrase "annual report" in quotes should yield some results. Although they are allowed to, corporations are not required to file their informal annual reports to shareholders with the SEC, so they are not always available through EDGAR.
5. Industry- and Market-Specific News
No stock ever trades in a vacuum, and investors who focus too narrowly inevitably miss out on returns. It will always be preferable to recognize how the markets are moving in general, as well as the forces that are affecting each stock's industry the most.
Many investors who actively trade individual stocks stick to particular industries or sectors in order to better leverage the knowledge they acquire. Developing and maintaining a deep familiarity with the technology sector, for instance, will allow an investor to trade popular stocks like AAPL, AMZN, FB, and GOOGL more confidently.
Even investors who only hold a single stock in a given industry should try to keep up with the news affecting that company and its competitors. Every investor should regularly read up on how experts are talking about the markets and the national and global economy.
These takes often prove wrong, in the final analysis, but are just as frequently influential, in the meantime. While being aware of the minutiae concerning particular stocks can be helpful, there is simply no substitute for being informed in a more general sense. From traditional news sites to the trading platforms of online brokers, there are plenty of convenient ways to keep up.
Informed Investors Perform the Best
Many investors today are happy to sock their savings away into ETFs and let rising markets grow their portfolios over time. Investors seeking larger returns, though, frequently find that trading individual stocks opens up more opportunities.Being successful with a more active, discerning approach to investing requires staying on top of the latest information. Although it might sometimes seem like a lot to manage, investors who make regular use of the preceding five sources can count on being well informed about their stocks at all times.