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how to find the best stocks, ETFs & mutual funds

Basic Training for Winning Investors

Do you want to improve your mutual fund and stock analysis skills.  There is plenty of stock market information on the Web. Do you know how to use it to find the best stocks, ETFs and mutual funds? See if you know the answers to these questions. If not, you may not ready to play with the pros. 

• How do you determine if your stock is a bankruptcy candidate? 

• How do you find high dividend stocks? 

• How do savvy investors interpret analysts forecasts? 

• How do you know if the market is in a uptrend or in a downtrend?

• How do you spot the red flags signaling future disasters?

• How do you determine target prices for your stocks?

• How do you find the best mutual funds? 

• Where are the best resources for fundamental analysis data? 

Basic Training tutorials describe how professionals employ fundamental analysis strategies to pinpoint the best stocks and mutual funds. Each includes up-to-date links to the data you need to implement the described strategies. New tutorials are added every two weeks. 

Sharpen your mutual fund and stock analysis skills
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Basic Training Contents

Dividend Stocks 
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• How to Find the Best Dividend Stocks
  With the market for tech and other growth stocks arguably in over-exuberant territory, this may be a good time to consider dividend-paying stocks. Here's how to find solid dividend stocks.

• Utility Preferreds: Safe, High-dividends
  While you’re lucky to get 2% interest from a bank CD, many preferred shares issued by utility companies are paying 6% to 7% dividend yields. Here’s how to find them.

• Safe Dividend Payers
  Since no one can predict when the market will recover, pundits are advising buying dividend-paying stocks on the premise that you will be getting “paid to wait.” Problem is, that only works if you pick stocks that don’t cut their payouts. Here’s how to find them.

• Preferred Stocks: FAQs
  You’d think that preferred shares would be an arcane topic of little interest. But, in fact, my recent columns on preferreds generated unusually heavy volumes of mail. Here are the most frequently asked questions.

• Preferred Stocks For High Yields, Plus Capital Gains
  In July, before the credit meltdown hit in full force, I suggested that income-oriented investors consider preferred stocks as an alternative to money market accounts and bank CDs. A lot as happened since July. Now preferreds are even better buys.

• Check Out Boring Utility Stocks
  Has the market been a little too exciting lately? Maybe it’s time to consider something really boring like utility stocks. Here are some paying between 5% and 6% dividend yields.

• Profit No Matter Which Way Crude Prices Go?
  Which way are crude prices headed? Some say up—others say down. Canadian royalty trust shareholders profit when energy prices rise, but still enjoy a good return when they don’t. Here’s how to find them.

• Dividends Better Than Banks
  Given the uncertain economy, it’s tempting to park your money in the bank. But with banks paying less than 3%, many investors are seeking another alternative. Here’s how to find relatively low-risk stocks paying better than banks.

• Energy Pipelines: High Yields Plus Low Risk
  Energy pipeline operators, organized as Master Limited Partnerships (MLPs) offer a combination of low risk and high yields, an ideal combination for this shaky economy.  Here's how to find them.

• BDCs For High Dividends
  It’s getting harder for dividend investors to find high dividend-yield stocks. But, several stocks in one category, Business Development Companies, are paying dividends equating to 7% to 8% yields.

• Subprime Lending vs. REITs
  Fallout from the subprime lending fiasco is pressuring all REIT share prices. Is this a buying opportunity? Here’s what REIT investors need to know.

• Rural Telecoms Pay Big Dividends
  If the market been a little too exciting for you lately, it may be time to consider something really boring, say, rural telephone companies. You won’t be bored after you check out their dividend yields.

• Are REITs Right For You? 
  Over the five-years ending December 31, 2004, real estate investment trusts (REITs), returned 23%, on average, annually vs. the S&P 500’s 1% average annual loss. Here’s how to find the best REITs. 

• Finding and Evaluating High Dividend Stocks
  Dividend paying stocks are getting more attention, and for good reason. Here’s how to find and evaluate high-yield dividend paying stocks. 

• the 15 Percent Strategy
  If you do the math, you’ll find that 15 percent doubles your money in five years. Here’s a strategy that seeks stocks capable of returning 15 percent annually through a combination of stock dividends and capital appreciation.

• Dogs of the Dow
  Are you too busy to do the analysis required to select stocks for investment? How about a stock selection approach that requires less than one hour per year. This intriguing stock selection strategy called the Dow Dividend Approach, more popularly known as the Dogs of the Dow, has beaten the overall stock market substantially over the last 26 years. 

• Why Investors Can't Make Money Following the Analysts
  Can you make money following stock analysts’ advice? The answer depends on who you are.  For those with the big bucks such as hedge funds and other big players, the answer is yes. But it’s a different story for individual investors. Here’s why.

• Pay Attention to Analysts - Just Don't Follow Their Advice
  The analyst buy/sell ratings and earnings forecasts contain important information that could help you make money. But ignore their ‘buy/sell’ ratings. Here are the details.

• Guidance Predicts Share Price Direction
  Until recently, when a firm reported earnings, its stock went up if earnings beat analysts’ forecasts and down if they didn’t’ But that was then. Now, the rules have changed. Here are the details.

• When Sell Means Buy
  An analyst’s rating downgrade usually drives a stock price down. But if the reason for the rating change was solely valuation, the downgrade could be a buying opportunity.

• Watch Out for Ground Floor Opportunities
  If you’re like me, you probably receive frequent e-mails from people you don’t know alerting you to opportunities to get in on the ground floor of exciting new businesses. Unfortunately, in many cases, it’s more about making money from selling stock to unsophisticated investors than about starting a groundbreaking new business. 

• Pick Hot Industries
  Savvy investors know that your chances of making money depend more on selecting the right industry than it does on picking the right stock. Here’s how to spot hot industries.  

• Get the Industry Scoop  
  Many investment professionals consider keeping abreast of industry trends just as important as pouring over financial statements. It makes sense. Knowing that your candidate’s currently hot products are about to go out of fashion would surely influence your analysis. Here’s where to find the info. 

• Industry Timing Using Exchange-Traded Funds
  Not everybody loses money in a weak market. Investors in the right industry can make money, even in rough markets, if they know when to get in, and when to get out. Here’s how to use Exchange-Traded Funds for industry timing.

• Closed-End Funds Offer High Dividends
  Closed-end funds offer advantages over regular mutual funds, especially for investors seeking high dividends. But most investors don’t know much about them. Here’s what you need to know. 

• How to Pick the Best Mutual Funds
  The amount of mutual fund performance data can be overwhelming. Not to worry! Here are a few simple rules for picking the best funds.

• Screening For Mutual Funds
  Mutual funds offer advantages over owning individual stocks in this rough and tumble market. Here's how to use Morningstar's free mutual fund screener to find worthwhile mutual fund candidates.

• Time for Alternative Energy?
  As bad as the market has been, alternative energy stocks have done even worse. Most are down more than 50%. But President Obama has made reducing  dependence on foreign oil a top priority. Considering the fall they’ve taken, alternative energy stocks have strong upside potential. ETFs are the best way to get involved. Here are some that I found interesting.

• Do Managed Mutual Funds Outperform?
  In a market like this, managed mutual funds, in theory, should outperform the overall market. So far, that hasn’t happened. Here are the details.

• Market-Neutral Funds: Rx For All Markets
  Instead of trying to figure out which way the market is headed next—consider “market neutral” mutual funds. They’re designed to generate positive returns whether the overall market moves down or up.

• Collect Foreign Money Market Rates
  The last time that I checked, local money market and CD rates were running in the 3.0% to 3.5% range. That’s not much compared to the 12% or so you could collect in Brazil, India, or South Africa. Here are the details.

• Make Money From Rising Commodity Prices
  Soaring oil, corn, wheat and other commodity prices are squeezing consumers. But you don’t have to take it anymore. Thanks to exchange-traded-funds, you can make money from rising commodity prices.

• PowerShares' ETF Results: Nothing to Shout About
  A year-ago I described a new twist on exchange-traded-funds (ETFs) marketed by PowerShares Capital Management, which appeared to have an advantage over the competition. Last week, I checked on how the PowerShares funds have done over the past year. Unfortunately, so far, the results have been mixed.

• Use Funds to Invest in Oil
  If you believe that high oil prices have become a fact of life, this may be a good time to check out investing opportunities in the sector. Here are some ideas for doing it with mutual funds.

• Power of Compounding
  Probably the most important thing you need to know about building wealth is the power of making regular periodic investments and reinvesting rather than spending the profits. The results you’d get are astounding. Starting with nothing, you'd have a cool $1.7 million in 30 years if you just match the market's historical returns. Here's how. 

• Exchange-Traded Funds (ETFs)  
  Sophisticated investors such as hedge fund managers have recently adopted exchange-traded funds (ETFs) as their favorite investment vehicle. But there is no reason why individual investors can’t also exploit the benefits of ETFs. Here's what you need to know. 

• Beware of Fund Manager Changes
  A mutual fund’s past performance gives us a good clue to the future. After all, if a fund manager has been a good stock picker in the past, he or she will probably continue to pick good stocks. But all bets are off if the fund changes managers. Here’s how do you find out about fund management changes and a passel of other worthwhile info.

• Making Bond Investments Pay  
  The current stock market is driving many investors to look to bonds as an alternative. Here are some tips for finding and evaluating bond mutual funds. 

How to Research & Analyze Stocks
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• Stock Risk Score Sheet
  Everybody knows that buying stocks involves risk, but some stocks are a lot riskier than others. Here’s a simple score sheet for evaluating the risk of stocks that you already hold or are considering buying.

• Corporate Tax Rates Move Earnings
  Corporate income tax rates play a big role in determining whether your stock will beat or fall short of forecasts at report time. Here’s how to figure out which way that wind is blowing.

• Using Margins to Pick the Best Stocks
  Sometimes picking the best stocks in an industry is as easy as looking at gross or operating profit margins. Here's how.

• Looking For Growth in All the Wrong Places
  Acquisition-fueled growth is like a Ponzi scheme. It works until something goes wrong. Here’s how to spot serial acquirers. 

• Four Important Stock Picking Factors
  Want to pick better stocks? I ran some tests last week that identified four factors that could help you do just that. Here are the details.

• Stock Analysis Gets Easier
  The last thing most of us want to do is spend our days analyzing financial statements, even though we know it would help us pick better stocks. If you’re in that category, here’s some good news.

• Fannie, Freddie & AIG—Cheap For Good Reason
  Shares of AIG, Fannie Mae, and Freddie Mac are trading at a fraction of their former highs. Also, according to Yahoo, AIG is paying a 25% dividend yield. Here’s why you should avoid these stocks.

• Avoid Big Losses By Checking Balance Sheet Red Flags
  Crocs' shareholders who ignored two balance sheet “red flags” saw $1,000 turn into $209. Here’s how you can avoid making the same mistake.

• Finding Google
  Most investors are looking for the next Google: stocks with rapidly growing earnings that will send their share prices through the roof. Here are 6 important rules for spotting hot growth candidates.

• For Every Stock, There's a Season
  Making money on a stock may be as much about when you buy as what you buy. Here's how to find the best time of the year to buy your favorite stock. 

• Death List = Risky Stocks
  With the Dow hitting new highs almost daily, the market has been fun lately. Unfortunately, it’s easy to get caught up in the excitement and pay too much for stocks that have already seen their best days. Here’s how to identify stocks in that category.

• When to Sell 
  You can find plenty of advice about when to buy stocks, but knowing when to sell is equally important. Here are my selling rules.

• Pick Stocks Like Warren Buffett
  Many investors consider Warren Buffett to be a pretty good stockpicker. Here's how to find stocks that Buffett might like.

• Brushing Up On Basics
  Your mail tells me that new investors might not understand all of the terms that I use in these columns. So, here's an explanation of some of the stock market jargon I’ve been throwing at you. But experienced hands need not tune out. As usual, I’ve included enough of my own debatable opinions to make it interesting. 

• Selling Short Can Backfire
  I get a lot of mail asking me to describe a strategy for picking short-selling candidates. That mail has gone unanswered. Now I’m going to tell you why.

• Cramer Can Help You Make Money
  Watching Jim Cramer's "Mad Money" TV show is like a visit to the loony bin. But Cramer can teach you how to be a better investor. Here's the best news: you don't have to watch him on TV.

• Use Cash Flow to Spot Problems Early
  Investors who bought Krispy Kreme Doughnuts at its August 2003 peak and never sold would have $150 worth of stock today for every $1,000 that they originally invested. But those savvy to analyzing cash flow had plenty of warning that something was amiss. 

• Survival of the Fittest
  Survival of the fittest, the law of nature that says, "Only the strongest survive," is a principal that investors should apply to qualifying stock candidates. Here's how. 

• Get a Jump on the Big Players
  Institutional players move your stock’s share price big time when they buy or sell. Knowing how they think will help you predict which way your stocks are likely to move next.

• How to Detect Creative Accounting 
  Almost every day we’re hearing about how corporations have played fast and loose with accounting rules to hype their earnings. Here’s how to spot firms that rely on the nonrecurring trick to make expenses disappear

• Two Easily Detected Red Flags  
  The last time I looked, shares of discount retailer “99 Cents Only Stores” were trading at $14 or so, down around 60%. But careful investors who heeded two simple ‘red flags’ had plenty of time to get out with little or no loss. Here are the details. 

• Analyzing Stocks Just Got Easier
  Good news for fundamentally inclined stock investors. Put away your green eyeshades, analyzing stocks just got easier.

• Easier Way to Spot Accounting Red Flags
  Stocks usually take a big hit when a company reports earnings below expectations. That’s why some investors go to great lengths to detect “red flags” warning of such events. But you don’t have to. Here’s an easier way. 

• Six Quick Growth Stock Checks
  Don’t spend time analyzing stupid stocks. Here are six items you can check in a minute (no kidding) that will help you rule out bad ideas so you can spend your time researching worthwhile candidates.

• How to Gauge Interest Rate Risk
  Interest rates are likely to go up when the economy improves. Here’s how to gauge the risk to your stocks in a rising interest rate environment. 

• Picking the Industry Leader 
  In the stock market, it pays to bet on the leader. Here's how to pick the strongest player in an industry sector. 

• Focus on ROE Instead of Earnings
  Investors would fare better by focusing on a firm's profitability rather than earnings per share when researching a stock. Why? Because as you'll soon see, one profitability measure, return on equity, can help you gauge a firm's earnings growth prospects. 

• How to Profit From Stock Buyback Announcements 
  You may be able to improve your stock returns by focusing on firms that are buying back their own shares. But be sure your companies are actually doing it rather than just talking about it. Here’s how to do the analysis. 

• How to Spot Takeover Targets 
  Even in this market, you usually make money if you are lucky enough to hold a stock when the underlying firm is bought out. Her are some ideas for spotting acquisition candidates.

• New Rules for Valuing Stocks
  Investors typically rely on P/E ratios to value stocks. Now valuation is even more important, but in many cases P/E isn’t meaningful because recent earnings, the “E” in P/E, are either depressed or non-existent. Here’s how to get around that problem along with two more ideas to help you evaluate stocks in this market. 

• How to Analyze a Company's Business Model
  If you were buying a real business, you’d probably spend considerable time analyzing each prospect’s profit potential. Yet few investors spend much time analyzing the business models of the stocks that they purchase. They’d be better investors if they did. Here's how to get started. 

• How to Set Target Prices
  Setting target prices is something that professional money managers almost always do, but individual investors almost never do. Most are not aware of the importance of setting target prices, nor how to go about doing it, even if they want to. Here’s a simple procedure for estimating target prices.

• A New Look at Value Investing   
  I’ve recently had the occasion to talk to several value-style managers about their selection strategies. As a result, I have a new appreciation for the craft, and in fact, value investing makes a lot of sense to me. Here’s a rundown on what I’ve learned.

• Get a Second Opinion
  Even if you’ve done a thorough job of analyzing a stock, it pays to get a second opinion before you buy. Here are three sites ready and willing to give you their take on your picks. 

• Stock Scouter, a Powerful Stock Analysis Tool
  Microsoft’s MSN Money's powerful free tool will help you analyze stock investment candidates. Here are the details. 

• Save Time -- Prequalify 
  Fundamental investing requires spending time gaining an understanding of a company’s business and its growth prospects. Here are some quick rules that I use to eliminate weak candidates before I do serious research.  

Finding Stocks to Analyze (Screening, Tips, etc.)
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Please note: the Reuters stock screener mentioned in many of these articles is no longer available.
However, you can usually run the same screens using the free MSN Money Deluxe Screener.

• Momentum Strategies Don't Get the Attention They Deserve
  Despite their heavy use by hedge fund managers, not many investors use momentum strategies to pick stocks” But, in my experience, they work, especially for short-term plays. Here’s a rundown and a screen for finding momentum candidates.

• Spotting Takeover Candidates
  Charlotte Russe shareholders recently enjoyed a 27% share price pop after the teen clothing retailer agreed to be acquired by a buyout firm. Obviously, there’s money to be made if you can spot a takeover target before the news hits the wires. Here’s a screen for spotting buyout candidates.

• Time to Consider Growth Stocks
  With the economy no longer looking like it’s falling off a cliff, and the stock market showing signs of life, this may be a good time to consider edging back into the market. If you agree, here’s a search you can run on Morningstar’s user-friendly stock screener to find interesting growth stock candidates.

• New Tool For Finding Growth Stocks
  It looks like the government will get the credit markets working again. If that happens, the stock market will begin looking beyond current conditions to the recovery. Zacks‘ new tool for finding growth stock candidates will come in handy. Here are the details.

• Stocks For a Rebound
  Despite the continuous flow of bad news, eventually, the market will recover. Today, I’ll describe a strategy for finding stocks worth considering in a rebounding market. Here’s why you should be getting ready now.

• Brazil is Hot!
  An index of Brazil stocks traded on U.S. exchanges has gained 83% over the past 12-months compared to a 6% drop in the S&P 500. Here’s to invest in Brazil.

• China Stocks
  With the U.S. economy sputtering, many investors are turning their sights to China. And for good reason! China is experiencing unprecedented growth as it emerges from third-world status to a major economic power. Here’s how to find and research China stocks that are listed on U.S. exchanges.

• Time to Look at Shipping Stocks
  Given the uncertain outlook for the U.S. economy, this might be a good time to consider shipping stocks, that is, companies that operate ocean-going cargo vessels. Here's how.

• Cash Rich Stocks: Rx For Credit Jitters
  How to find cash rich stocks with no-debt and strong growth prospects, your best plays in this jittery credit market.

• Interesting Drug Candidates
  Pharmaceutical giant Pfizer’s recent problems got me thinking about generic drug makers as an alternative to the big guys. Unfortunately, my research found that generics were a bad idea. But, in the process, I discovered other interesting prospects in the drug field..

• Little Book Beats the Market
  The best selling stock market book these days is “The Little Book That Beats the Market.” The reason is no mystery. The book describes a simple formula that, according to its author, would have averaged a 31% annual return from 1988 through 2004. It’s worth a look.

• New Sites To Help You Make Better Investing Decisions 
  The Web, at least from an investing perspective, is undergoing a resurgence and dozens of new investing sites have surfaced in recent months. Here are some that I’ve found interesting.

• Important New Investing Resources
  Investing resources on the Web are multiplying and evolving in ways that few of us would have predicted. Here are some of the best.

•  Investing for Beginners
  Is investing an undecipherable puzzle? Here are five sites where you can get up to speed on the basics of investing.

• Four Good Sites
  There is still plenty of free information on the Web that will help you make better investing decisions. Here are four worthwhile sites that I haven’t told you about before.