Investing individual stocks is a dream for many investors, but they don’t because it’s too risky for their level of investing experience. The best investments sites let the average investor buy individual stocks with minimal risk.
With these sites, you can receive expert-researched stock recommendations that you can invest in and earn long-term profits that outperform the broad market.
Picking individual stocks can be intimidating if you’ve never done it before. By nature, individual stocks are more volatile than ETFs or mutual funds because you only invest in one company instead of a small position in multiple companies. If you already have a diversified portfolio, adding individual stocks is your next step to earning passive income.
I’ve personally been investing in individual stocks for the last decade. The first individual stock I purchased was company stock in my 401k plan. To diversify my portfolio, I began buying individual stocks in my personal brokerage accounts because of the recommendations from investment sites and newsletters.
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Best Online Investment Sites
Here is a quick ranking of the best online investment sites:
- Ally Invest: Best Overall Site
- Betterment: Best Site for Beginners
- TD Ameritrade: Best Investment Selection
- Wealthsimple: Best Robo Advisor
- Personal Capital: Best for Large Investments
The Best Investments Sites for Any Investor
While you can make a fortune trading options, shorting stocks, or investing in penny stocks, you should leave these investing strategies to the pros. When you are just beginning to diversify your portfolio or want to own stocks that provide steady dividends, you only need to buy individual stocks that should outperform the market for the next three to five years.
The best thing you can do is visit a few of these sites and decides which ones offer the most valuable information to you. It’s always good to get your information from at least two different sources so you can cross-check opinions to gain a complete understanding of the market and your potential investment.
To maintain a diversified portfolio, don’t forget that you can also use these resource below to research ETF investments too.
1. Motley Fool Stock Advisor
When you’re ready to buy individual stocks, you should consider Stock Advisor from The Motley Fool. Each month, brothers David and Tom Gardner release two new recommendations for stocks they believe will outperform the market long-term.
Since Stock Advisor launched in 2002, brothers David and Tom Gardner release two new picks each month. David’s picks alone have outperformed the S&P 500 by 513.8%! Tom’s picks have outperformed the same benchmark by 88%. While your S&P 500 index funds held during the same time period would have grown 93% by tracking the market performance, picking the right individual stocks can help you actually beat the market.
I personally subscribe to three different investment newsletters, including Stock Advisor, to make informed investing decisions. While I’ve had a few losers along the way (like any investor), I’ve been pleased with Motley Fool’s advice so far.
To help you understand David and Tom’s investment philosophy clearly, here’s how Motley Fool sums up the brothers’ investment philosophy:
It’s a generalization to be sure, but David swings for the fences. He’s willing to take the occasional stumble, so long as his total portfolio is up. Tom, on the other hand, never wants to see one of his stocks down 20% or 30%. He prefers to score runs consistently through constant base hits; David’s more about home runs. You may be somewhere in between. That’s why it’s important that you pick your investments on a stock-by-stock basis, just like we do.
Although you don’t have to buy every recommendation, you need to buy several of them to be a successful investor. Stock Advisor only recommends you to sell a stock when it appears the company won’t outperform the market for the next three to five years.
How to Be a Successful Investor with Stock Advisor
Besides two monthly picks with a detailed analysis, I probably enjoy the straightforward investing model Stock Advisor follows. Each recommendation explains the current company fundamentals, why the stock is a good pick for at least the next three years, and the potential investment risks that might cause you to sell the stock sooner than anticipated.
David and Tom’s goal is for you to eventually own at least 15 stocks. To make your decision easy, they categorize their recommendations into the following categories:
- Starter Stocks (10 proven winners that can benefit any portfolio)
- Best Buys (The best recommendations selling at a relative to discount to future earning potential)
Stock Advisor recommends investing in at least three starter stock recommendations first. After that, you can expand to their best buy recommendations to invest in stocks that have more growth potential but might also have more volatility.
Besides these stock recommendations, you can also create a personal watchlist to track potential future investments, read investing articles, and interact with other Motley Fool members in the community forum to bounce investing ideas around.
An annual subscription to Stock Advisor costs $99 or you can pay $19 monthly. With either option, you get a 30-day free trial.
Personally, I never spend more than $199 per year for a single investment site. Following this rule, Stock Advisor is a bargain for the caliber of investment advice you receive as similar newsletters easily cost double the price.
Many beginners and experienced investors like Investopedia because of their educational database, market news articles, and their investing simulator. For free, you can make simulated investments with a $100,000 starting balance to test investing ideas! Before you invest your own money with some of the investment ideas, you can see how the play out with paper trades first.
Investopedia has also rolled out an online academy where you can take video courses to learn more about how to invest. All of the best investments sites include how-to articles, but maybe you enjoy a more interactive learning method.
Zacks provides some free investing commentary but their premium service also provides a list of “Top Stocks to Buy” and report cards for over 5,000 individual companies. Each company is assigned a grade and the potential upside and risks for present and future perfomance. They also rate the best companies by industry if you want to gain exposure to the healthcare or technology sectors for instance.
While any investor can benefit from Zacks Premium Research, it’s probably a better option if you are following a particular investment strategy and can use their stock screener so you can filter stock recommendations by some the following traits:
- Earning Surprises
- Best Industries
At $249 a year (after the 30-day free trial), you do get valuable research but you also have to invest more money so your investment returns can “pay” the annual subscription fee. If you still need to buy your first stock or you already have access to similar analyst reports in your brokerage, Zacks might not be the best option at this time.
Get free detailed research reports when you invest with a discount brokerage like TD Ameritrade.
4. Seeking Alpha
Seeking Alpha is arguably one of the best free investments sites for free advice. I personally subscribe to the daily Wall Street Breakfast email that includes a quick summary of the market’s top headlines. It let me quickly track any recent moves for the positions I hold or planning to acquire.
You can also read articles to get investing ideas and read market commentary from Seeking Alpha contributors. Personally, I use these article during the research phase so I better understand an investment recommendation.
5. American Association of Individual Investors (AAII)
Maybe you’ve received an envelope in the mail from AAII. Many people regard AAII as a respected source for learning how to invest in stocks, ETFs, and mutual funds. You can also use their model investment portfolios as an example to build your own investment portfolio.
An annual subscription only costs $29 a year which makes AAII one of the most affordable paid investment research sites.
Barron’s is a highly-respected investing publication that offers daily market insights and weekly stock recommendations. You can subscribe to the digital version or also receive their weekly print newspaper if you still prefer reading investment advice on paper instead of a computer screen.
Each week, Barron’s gives readers five new investing ideas from a team of individual stock pickers. Many subscribers usually follow the recommendations of the portfolio that best represents their investing strategy. These ideas focus on company fundamentals, much like the Motley Fool Stock Advisor so you don’t have to worry about short-term trades that require you to closely watch the markets.
If you’ve ever read a copy of The Wall Street Journal, then you will be very familiar with Barron’s content format.
INO is another investments site that offers free market analysis and a weekly stock pick. Of course, you can also opt for one of their premium MarketClub which offers top investment recommendations for stocks and ETFs plus advanced research tools. For casual investors that only want basic commentary and the free weekly stock pick, you will find all the information you need without becoming a paid subscriber.
Like other investments sites, you can access a trove of free articles to help you understand the markets and investing ideas. You will need to purchase a premium subscription ($189 annually) to access the Morningstar rating and detailed analysis for investments.
Kiplinger’s is best known for their monthly personal finance magazine that offers investment recommendations and money management advice for every age. An annual subscription to the magazine costs $12.
Several columnists provide monthly investing ideas, plus each month features a special report of other stocks, bonds, ETFs, and mutual funds you might want to buy too. You can act on one of the new recommendations or follow one of their investing lists:
- Kip Dividend 15 (Best Dividend-Paying Stocks)
- Kip 25 Mutual Funds (Best 25 Mutual Funds to Own)
You won’t find the same level of deep analysis as some of the other recommendations on this list, but Kiplinger’s ranks as one of the most trusted magazine brands. If you follow the buy and hold investing approach and act on several of their recommendations, you should have no problem earning consistent investment income.
CNBC is the most watched investing news channel. To save time (and the cost of a cable tv subscription), you can visit their website to read the numerous articles for free.
You’re going to find bullish and bearish sentiment so you should use this as a research tool and to keep up with the latest market news. If investing news is being made, it’ll probably land on CNBC first so it’s worth a regular visit if you’re curious what’s happening in the financial world.
Because CNBC is mostly news articles, make sure you read the bull and bear-side opinions for your potential investments. You can also use the content to gauge market sentiment in addition to tracking current financial events.
The Wrong Way to Buy Individual Stocks
Once your investment portfolio has a solid allocation of ETFs and index funds to minimize market volatility, you’re ready to begin investing in stocks. As a general rule of thumb, each stock you buy should only be a maximum of 5% of your total portfolio to minimize your downside risk. If you have $10,000 in your brokerage account, each stock position might only be $500 if you follow this rule.
Although you don’t need to use the advice from investment sites to purchase stocks, it can help you avoid these common investing mistakes:
- Investing in company stock just because you work there (i.e. Enron or General Electric)
- Only buying stock for brands you use (the product might be good, but their business model isn’t)
- Trading stocks on headlines (momentum trading) instead of long-term fundamentals
- Investing in stocks without understanding the company’s business model
- Having a single position take more than 5% of your total portfolio allocation
- Not performing your own due diligence (always conduct additional research for any recommendation)
Stock investing isn’t a “get rich quick” scheme. Although there are successful day traders and momentum traders, most successful investors follow the “buy and hold” approach and ignore the periodic share price dips.
This is why it’s so important to get investment advice from a third-party resource. Investing in stocks and ETFs can be easy and successful if you use the proper resources.
Professional investors rely on many of the same resources mentioned above to research potential investments. You can access to the same information without paying hefty advisory fees or subscribing to a $1,000+ investing newsletter. When you’re ready to start investing in stocks and ETFs as a DIY investor, you can succeed when you use these investments sites.
Which investments sites do you plan on using first? Do you plan to trade stocks, ETFs, or both?