This is the second part of “A Better Way” series highlighting advancements made by TradeSmith over the past year to help our readers be more efficient so you can accomplish more and learn more in a shorter timeframe. The first part of the two-part series is available here.
Long-time TradeSmith members know that I like to use TradeStops to help me find stocks of interest for my portfolios. Now, in addition to TradeStops, there’s a better way to follow the markets that gives me even more information than before.
In the past, I used TradeStops to set up Watch Portfolios, enter the stocks I wanted to follow, set up alerts, and get notified when my alerts for those stocks were triggered. For instance, I set up a Watch Portfolio a couple of years ago of dividend-paying stocks. My choices were based on the top 10 holdings in the Vanguard Dividend Appreciation ETF (VIG). Here’s how the holdings show up in my watch portfolio:
This is certainly a nice portfolio of stocks, but the truth is, I haven’t updated this list since it was set up in July 2017. Going back to the Vanguard website, I see that I’m missing three of the current top 10 holdings (Visa, Proctor & Gamble, and Comcast), which means I have three in this list that aren’t in the top 10 (MMM, PEP, and TXN).
And that’s the weakness of trying to find stocks using TradeStops only. The portfolios don’t update themselves; they have to constantly be monitored and manually adjusted. They certainly don’t update automatically.
The VIG ETF is composed of all large-cap, dividend-paying stocks. But what if there was a better way to look for these types of stocks that’s constantly updated and available when I want to see it?
There is. It’s a powerful tool inside Ideas by TradeSmith called the Stock Finder. This tool lets me search for a current list of stocks that qualifies for what I want to find. Let’s use the large cap dividend-paying stocks as an example.
Here’s my search criteria: I’m looking for mega cap and large cap stocks that have a dividend yield of more than 3.5%, are in the Stock State Indicator (SSI) Green Zone, and qualify as a Dividend Grower in TradeSmith’s Lab. The image below shows how we would enter that information in the Stock Finder.
And here are the results. We’ve got 12 stocks — as of this writing — that passed all of the screens we were looking for. If we want, we can sort the columns by dividend yield to work with the highest yielding stocks first.
There’s not a day that goes by that I don’t use the Stock Finder to look for certain stocks. If you’re looking for small cap healthcare stocks, which would include biotech stocks, the Stock Finder can do that. If you’re looking for nano cap technology or communication stocks, the Stock Finder can do that. If you believe that we’re heading towards a new bull market, you can even screen for stocks in the SSI Red Zone, but are trending higher.
Just because the Stock Finder is able to come up with a list of stocks, you shouldn’t blindly buy any of them. You’ll still need to do the research and make sure they’re right for you and your risk tolerance.
I’ll close this article with a story of something that happened a couple of weeks ago. I had the pleasure of attending the Oxford Private Wealth event in New York. One of the attendees came up to me and told me that she’s a Lifetime member of both TradeStops and Ideas. She said that she’s comfortable using TradeStops, but with the markets’ volatility, was looking to move some money into income-focused investments. One other thing: she mentioned she’s a Canadian citizen and wanted some Canadian stocks.
So, we went to the Stock Finder, and searched for stocks in the SSI Green Zone, with a Volatility Quotient (VQ) less than 10%, that were yielding more than 5.5%, and that traded in Canada.
We came up with a list of about 27 different stocks on the spot, and she had her homework ready for when she returned back home.
We’ll show you the better way to follow the markets and to search for stocks in our educational webinar this coming Wednesday, Aug. 21, at 1 p.m. Eastern. Click here to register for the presentation.
Research and Education Specialist, TradeSmith