1. Gather the right tools
With the right tools, you can cut through the flood of information and gain the insights that help you make decisions. A good tool should allow you to scan through the vast universe of investment options, compare them and easily dig into their fundamentals.
The tools should also be able to give you a bird’s eye view of the market and the economy. For example, CIBC Investor's Edge summarizes the current performance of major stock markets for Canada and the United States, making it easier for you to compare the relative strength of either economy. It also offers a Stock Centre, ETF Centre and Fund Centre to help you dive deep into the underlying fundamentals of individual stocks or the management fees and holdings of specific mutual funds and exchange-traded funds.
With the right tool at your disposal, you can conduct sophisticated investment research with confidence.
2. Know what you’re looking for
With the right tools in hand, the next step is to create a list of criteria that fit your investment style and long-term objectives.
Suppose you’re looking to preserve wealth and minimize risk. Given this goal, you might want to focus on Blue Chip stocks — investing in stocks of companies with large market capitalization ratios, diversified earnings, low debt and robust track records (of profit or consistent dividend payments). On the other hand, if you’re seeking aggressive growth, you may need to set specific criteria about revenue growth rates, earnings growth and return on equity.
You may also need to set criteria for valuations that fit your investment style. If you’re seeking undervalued stocks, using the CIBC Investor's Edge screener, to filter out stocks with a high price-to-earnings ratio could be an excellent way to discover opportunities.
3. Follow the experts
Professional investors, economists, and analysts frequently publish high-quality research that can help all investors. To be clear, experts are not infallible, and you probably shouldn’t buy or sell a stock simply because an analyst is optimistic or pessimistic about its future. However, checking in with expert opinions could help you spot trends or issues you may have missed or offer a fresh perspective that you may not have considered.
These expert reports can also help you keep up with complicated developments in the stock market and economy that help clarify your own research. Of course, it doesn’t hurt to know if professionals agree with your independent assessment, cementing your investment thesis or outlook for specific stocks.
CIBC Investor's Edge offers users a convenient way to tap into these expert insights and premium research via the Analyst Reports menu on the platform.
4. Set up trackers and alerts
Markets move fast, and a press release or new product announcement could have a considerable impact on stock prices. If you’re not a professional investor who spends all day tracking the market, there’s a good chance you’ll miss something important.
To avoid this, you can set up trackers and alerts for key developments. You could set up an alert if a stock on your watchlist drops below a certain price. Once alerted, you could purchase the stock — an action that aligns with your overall investment plan. Similarly, you can set up alerts for earnings releases and new public listings to track the performance of companies you’ve already invested in or new ones that are coming to the market soon.
5. Minimize costs
Costs are one of the few things that investors can decisively control. Minimizing costs on all levels can help you keep more of your money and fully enjoy the benefits of savvy investments.
Brokerage fees are the most obvious expenses investors face. Some platforms charge a percentage of the trade value, while others charge a flat fee for every trade you execute.
For instance, CIBC Investor’s Edge charges $6.95 per trade for stocks, mutual funds and ETFs. However, you can reduce these transactional costs in a variety of ways. For example, stock trades on student accounts are priced at $5.95, while Young Investor accounts have access to free stock trades.
Flat fees and special discounts like this can offer investors more transparency and fewer complications while calculating what investment moves to make.
Bottom line
Stock research doesn’t need to be complicated or time-consuming. With the right tools and a well-crafted investment plan, you can confidently start making investment decisions.
