3 Reasons Every Investor Needs a Stock Screener
A stock screener is a tool every investor should have if they’re serious about trading on the stock market. This tool can be web-based or downloaded. These options can be expensive and you can use free screening tools, but if you’re looking for quality information, it’s worth your while to pay for a stock screener.
You may be watching the stock market daily and keeping an eye on the news, but having a stock screener simplifies the process for you by filtering stocks available on a large database. Why else would an investor want a stock screener? Read on to find out how this valuable screening tool can be your best investment advisor.
1. It Does the Research for You
Before stock screeners became available, an investor would spend hours trawling through stock tables in financial articles and newspapers. If you couldn’t get enough information online, you would need to contact the company for their financials. Only then could you start with analysis to decide if it was a good company whose stock you want to own. This process could become tedious and time consuming.
A well-designed stock screener saves you time by narrowing down the research work. It allows you to filter stocks based on search criteria you’ve specified. This could include the ratios and indicators of companies such as future growth potential. While you may still need to do some homework, most of the work is done for you.
2. It Stops You From Making Emotional Decisions
Have you ever heard of the investor behavioral bias? This is a very real trait many investors face even if you consider yourself highly disciplined. Behavioral bias happens when you make an investment judgment call based on your personal emotions.
You may decide to invest in a company you really like because of their products, but having a personal preference for a company may mean you override any logical thought processes required to make a wise investment. A stock screener can take the emotion out of making an investment decision. You can still pick your target on the tool, but if you’re open to allowing the stock screener to guide you to better quality companies, then you’re using the tool without behavioral bias interfering.
3. It Gives You More Investment Options
A stock screener is designed to give you as much information about available stocks on the market as possible. With over 60 major stock exchanges in the world amounting to the value of $69 trillion, finding the right stocks can be a minefield.
A screening database can have up to 8,000 stocks. A stock screener program opens up the potential investments that may be undervalued, allowing you to explore better investment options.
How do you go about finding the right stock screener for your investment needs? Start by making a list of stock screeners available. Do a bit of research on each one and decide on the right tool for you. There are enough ways in which a stock screener will help you be a better investor. Invest in this smart tool today and start trading successfully.