AAII Cleveland Ohio Chapter

I have a complicated process.  It includes multiple accounts at two brokerage houses,  Stockcharts and MarketSmith.  I download, upload and cross reference SC and MS before ultimately trading at one of my brokerages.  There has got to be an easier way. 

What are you doing to search and research then ultimately buy and sell stocks...maybe I could learn easier process.  John

Well, John, I'd suggest  you start by consolidating the funds you plan on investing into 1 brokerage house. Then, stop downloading / updating - - - too time-consuming. Instead, master that brokerage house's online charting system (or Stockcharts). Then, develop the criteria you intend to use to assess any prospective stock. Your criteria may be fundamental, technical, or a combination thereof. Have the online charting system produce a list of stocks that meet your criteria and have it sort them with the best possibilities at the top. You need to decide if are you a short term trader (daily), long term (years), or something in between (weeks / months). Finally, design and use a chart with a trend line on price. A simple moving average (MA) is a good choice,  EMA is better, but the wavelength (# of days) of the MA needs to be consistent with how often you intend to trade. The trend line will periodically change directions (that is, switch from falling to rising or vice versa). That will tell you when to buy and sell. The time-period covered on the chart needs to reflect how often you intend to trade. - - - Finally, on the chart, also include a line that is the Relative Strength of the stock relative to the S&P 500 Index. If the stock isn't out-performing the S&P 500 Index (that is the line is rising), then don't buy it (or sell it). In that case, you'd be better off just owning an S&P 500 Index fund. And, of course, regularly monitor the stocks you own, so that you know when to sell.- - - I hope you feel that helps. Some feedback would be nice.

Thanks for responding to my post.  To clarify a bit more it is all the minutia of managing and using multiple brokerages and research tool.  TDA, Fidelity, Stock Charts and Marketsmith.  The different brokerages are for diversity so I don't have all my money in the "Lehmann Bros" basket so to speak.  I don't like either of their research/charting platforms. Most charting is in Stockcharts but Marketsmith simplifies the research a lot.  I feel like I spend a lot of time jumping back and forth with out a streamlined process.  Stephen Covey says it best....don't spend your time in the thick of thin things.  I feel like my time is better spent managing my trades rather than bouncing between platforms and programs.

John,

I think you are asking about an idea for a simpler stock selection process, right? You could follow an AAII portfolio and add a tech analysis overlay for entrance/exits, assuming you want that type of additional research. Doing a deep dive into fundamental/quant processes with back testing is another hole (as in rabbit hole) story. One other idea would be to buy (and monitor) the top 10 holdings of an ETF that fits your investment game plan. For what it's worth, long-time investors have typically found that tech studies are worthwhile only in the hands of a very disciplined and experienced user. So, be careful there.

On the other hand, perhaps you are an experienced investor just sampling what other AAII members are doing. Not a bad idea. There are a lot of smart guys/gals running around the hallways. Of course, "common practice" does not really exist except to the extent of what to typically avoid (e.g.: high costs, low quality, story stocks, etc.).

Over the past few decades(+) it has been my professional and personal experience that simple works pretty well. Quality is important as are costs and having a well thought out investment discipline. Remaining humble as to our ability to forecast the economy and markets plays a big part, too.

Lastly, in my opinion, having more than one brokerage account is a good idea.  With internet access generally being so reliable nowadays we can forget that stuff happens and servers go down. Not likely, but a lot of things that can have very unsettling consequences are not likely. 

Keep at it. You'll figure it out.

Steve Reagh

Thanks for responding to my post.  To clarify a bit more it is all the minutia of managing and using multiple brokerages and research tool.  TDA, Fidelity, Stock Charts and Marketsmith.  The different brokerages are for diversity so I don't have all my money in the "Lehmann Bros" basket so to speak.  I don't like either of their research/charting platforms. Most charting is in Stockcharts but Marketsmith simplifies the research a lot.  I feel like I spend a lot of time jumping back and forth with out a streamlined process.  Stephen Covey says it best....don't spend your time in the thick of thin things.  I feel like my time is better spent managing my trades rather than bouncing between platforms and programs.

Hi John! To follow Stephen's comments, you mentioned "easier" and Stephen mentioned "simpler."   I agree with Stephen's comment about retaining your two brokerage accounts.  Additionally, I would add that the number of accounts is a personal choice.  I know several successful investors (and traders) that have multiple accounts.  There is no 100% correlation to your investing success and the number of accounts you have.   Next, if you are truly selecting individual stocks, the process should NOT be easy.  So if you are feeling uncomfortable with complexity of your process, be assured, so are others.   If you want easy(ier), follow Buffett's advise and just buy index funds.   If part of your current process of selecting stocks is paying  careful attention to your entry price(s).  It's probably no surprise to you that the lower your cost basis the higher probability you will make money (at some point).  Technically, while I agree that EMA and MA are useful tools to help you determine to commit money to your stock selections, I do not agree with the advice below that places your potential selection against the S&P 500.  If you are buying individual stocks, you are hopefully screening, evaluating, and choosing to buy good businesses.   If you don't want to spend your time doing that then by all means just buy indexes one way or another.  Lastly, if you are unsure about a possible new selection to your portfolio, then reduce your share commitment and write a covered call on it...and then watch (the chart).  You are never going to be right 100% of the time but if you are buying good businesses, you should be fine.

Thanks for responding to my post.  To clarify a bit more it is all the minutia of managing and using multiple brokerages and research tool.  TDA, Fidelity, Stock Charts and Marketsmith.  The different brokerages are for diversity so I don't have all my money in the "Lehmann Bros" basket so to speak.  I don't like either of their research/charting platforms. Most charting is in Stockcharts but Marketsmith simplifies the research a lot.  I feel like I spend a lot of time jumping back and forth with out a streamlined process.  Stephen Covey says it best....don't spend your time in the thick of thin things.  I feel like my time is better spent managing my trades rather than bouncing between platforms and programs.