How to Evaluate Stocks

By now you know my first step when evaluating stocks is to narrow the list of the 40,000 publicly traded companies to a manageable few. I call those my worthy stocks—worthy of a DIY portfolio manager’s time, effort, and evaluation process.

But how to evaluate a stock?

My favorite resource for learning how is AAII.com. Alternatively, its own software (AAII Stock Investor Pro) will do the evaluating for you. Basic membership in AAII costs $29.95 for the first year or a five-week membership for $9.95 for one year, $99 for four years, $290 for life.

Also, I recommend VectorVest. It evaluates any listed stock for you on request, and it will eMail you an easy-to-read, easy-to-understand written report—initially, a maximum of 10 reports for free.

Also, a seemingly endless number of free resources are available online. Chances are, I’ll continue searching for them as long as I continue blogging—and my blog is free.