What are Common Investor Problems?

What are these common problems and how much are they needlessly costing you?

Imagine, you are private investor and have been downloading share prices from www.marketeye.com and then preparing your own charts. That site has now closed and the only other organization which would supply this information would charge me $10,000 for the privilege whereas marketeye was free!

So runs the most popular query of all. A slew of traders prefer to download stock prices into the spreadsheet program Excel so they can draw their own price charts. Without them they don’t have buy and sell signals, and without those, they can’t trade.

But why don’t they just let specialist software do the work for them? I prefer using software such as Metastock (Equis.com and Paritech.co.uk), the costlier Tradestation, and OmniTrader 2000. All work with both U.S. and U.K. data. Each generates trading signals based on tested criteria and scans stocks according to your own requirements. Whether you choose end of day data or the more expensive intraday real-time data for the above software depends on whether you are a short-term trader. There is no shortcut to visiting websites and trying the software demo disks. Other popular well-regarded software includes Synergy, FairShares, Indexia, and Sharescope.

Whether you only want share price data or need company data too depends on how you pick stocks; whether you examine just price charts or company valuations too. I prefer having both price and company data for the fullest stock picture.

An alternative to software for plotting prices are websites. Consider Advfn which provide charts and plots company data in visual form for easier and quicker analysis.

For U.S. charts visit my favorites, the free, Quote.com, and BigCharts.

Despite the choices for plotting price charts, if you still prefer data you can plot in a spreadsheet program, visit London Stock Exchange, and Paritech.

For U.S. data visit Reuters Data Link. The novice will prefer starting with charting websites, which tend to be cheaper than software, then trying software demos and only finally investing in software.

Another question is: “Is it possible to get data, for example a table/spreadsheet on all companies including their essential fundamentals such as EPS, p/e ratio and profit?” This is a popular query as traders become increasingly weary about the time spent scouring for good stock picks. Imagine a marketbeating annual 10% return with five hours research a week on a $50,000 portfolio. For a higher rate taxpayer, the return is a mere $11 per hour. Of course the return beats the minimum wage. Our trader wants such data to both increase returns and reduce time spent producing those returns. For U.K. fundamental data try ShareScope software and Hemscott . Both are excellent sources of company data and save hours scouring for stocks. The U.S. web-based equivalents are the exceptional Yahoo and Multex.

More experienced traders often ask about trading psychology:

At the beginning of this year I had a string of losses which knocked my confidence. Checking these trades I found I had allowed extraneous emotions to enter the equation resulting in overreacting, for example, to intraday data and getting out of the trade too early and often at a loss. Do you know of any reference material to help one deal more comfortably with trading stress.

Indeed trading psychology is so important that Bill Lipschutz, in The Mind of a Trader, explained it was “the most important factor in trading success.” Other sites about preventing your emotions from sabotaging your trading include Trading On Target, TradeShare.com , and Dr Relax.

Finally, there is a whole category of questions which begin: “I bought [insert name of formerly popular technology stock] at [insert overinflated price] and now it trades at only [insert 0.1% of previous figure]. Is there any hope?”

Despite the dot-com collapse, innovation on investment websites has accelerated. New products to make all aspects of trading and investing simpler, more efficient, and hopefully more profitable are being launched at a faster pace than even in 1999. The problem is, without the huge marketing budgets of 1999-2000 behind the launches, you could easily have missed some of the latest online tools to make investing a whole lot easier. The value of any tool should be measured by one criterion: does it solve a long-standing private investor problem. These next generation tools all do, moving well beyond providing just stock prices, news, simple charting, and company data.