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3 Ways to Research Investment Ideas on tdameritrade.com

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March 29, 2016
stock-research-tools

Searching for a stock investment can sometimes feel like looking for a needle in a haystack. After all, there are thousands of stocks listed across markets in the U.S.

Additionally, the prices of stocks change second-by-second every business day while the stock market is open. Sometimes the average trend in stock prices is up, sometimes it’s down, and other times it’s sideways.

Certain groups of stocks sometimes move together. For example, look at charts of a few stocks associated with crude oil over the past year. You might see many of these stocks dropped, starting in October 2015, along with the price of crude oil.

With so many different stocks to choose from, and so many changing bits of data to consider, it can sometimes feel overwhelming trying to find investment ideas. Where can investors start?

Top-down Analysis

One place investors might start searching for an investment idea is on tdameritrade.com. There are tools on the website that investors can use to help identify and research ideas. For instance, the Sectors & Industries tool can help investors perform a quick top-down analysis. Think of top-down analysis like looking at a map of a town or city where you’re thinking about moving. You’ve got to see the big picture before deciding on the details of your next house.

The Sectors & Industries tool is one way to perform top-down analysis. This tool (see figure 1) is based on the S&P 500 and its ten sectors: Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Telecommunication Services, and Utilities.

To find the Sectors & Industries tool, log in to tdameritrade.com and point to Research & Ideas. Look under Markets and click Sectors & Industries.

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FIGURE 1: SECTORS & INDUSTRIES SORTED BY 3 MONTH PERFORMANCE.

The Sectors & Industries tool displays the performance of 10 sectors over a specified time period. Data source: SunGuard. Image source: tdameritrade.com. For illustrative purposes only. Past performance does not guarantee future results.

The Sectors & Industries tool has a lot of functionality that can help investors drill down further when performing an analysis. For instance, click on a sector to find an overview. On the overview page, investors can find Industries within this sector (see figure 2). Click an industry link to find a list of individual stocks.

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FIGURE 2: SECTORS OVERVIEW.

On the sectors overview page, visualize performance trends, find Industries within the sector, and much more. Data source: SunGuard. Image source: tdameritrade.com. For illustrative purposes only. Past performance does not guarantee future results.

Visualize Trends in Sectors

Another tool investors might find useful when searching for investments is the Market Monitor. This tool can help investors see the performance and market capitalization of all stocks in the S&P 500.

The Market Monitor is organized by the 10 sectors of the S&P 500. Each slice on the tool represents an individual stock. The slices are shades of green and red, corresponding with gains and losses in stocks: the brighter the shade of green or red, the bigger the gain or loss.

To find the Market Monitor, look on the Sectors & Industries page. In the upper, right-hand corner of the page, click “Explore a macro view of the markets” under the heading TD Market Monitor.

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FIGURE 3: MARKET MONITOR.

Visualize performance of stocks and sectors. Data source: SunGuard. Image source: tdameritrade.com. For illustrative purposes only. Past performance does not guarantee future results.

The default timeframe of the Market Monitor displays daily performance. But this can be changed by clicking the menu “Change Timeframe.” Other timeframes over which the Market Monitor measures performance include 30 Days, 3 Months, 6 Months, and 12 Months.

Bottom-up Analysis

The Sectors & Industries tool and Market Monitor are helpful when performing top-down analysis. But what if you’re looking for ideas in individual stocks? This is where Analyst Reports on tdameritrade.com can help.

There’s a tremendous amount of independent, third-party research on the website. Publishers of this research include S&P Capital IQ, Credit Suisse, Thomson Reuters, and many other firms. The best part? All this research is free.

To find the Analyst Reports on the website, point to Research & Ideas. Look under the Markets heading and click Analyst Reports.

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FIGURE 4: ANALYST REPORTS.

Use the free third-party research as a starting point when searching for investment ideas. Image source: tdameritrade.com. For illustrative purposes only. Past performance does not guarantee future results.

There are a couple of ways to make the most of the independent, third-party research on the site. For starters, read some of the reports that focus on finding investment ideas using a bottom-up approach. In contrast to top-down analysis, a bottom-up analysis is like looking for an individual home before considering the neighborhood or city to which you want to move.

Bottom-up analysis focuses on individual stocks and not so much the broader market. One example of independent, third-party research that provides bottom-up analysis is the U.S. Focus List by Credit Suisse.

Another way to make the most of independent, third-party research on the website, and perform bottom-up analysis, is by using the search feature under the heading Search Reports. Click Symbol and type a ticker symbol of a stock and click Go to retrieve research reports on individual stocks.

Whether you want to use top-down analysis, bottom-up analysis, or a combination of both, there are plenty of tools to help you find investment ideas on tdameritrade.com.