Stock Selection 101 – A Look Into How We Select Stocks

Individual stocks comprise 10% of our assets. The process of stock selection is time consuming and the avocational interest makes it worth the effort. Had it not been for the passion, Vanguard Index Mutual Funds and Exchange Traded Funds (ETF) would have served as the investments of choice for this area of our assets.

We employ stock screens and cover stock related literature to glean information on the selection. Here is a list of stock selection screens we commonly use:



As for the literature, we use Google Reader as the subscription aggregator and select articles based on title lines. Yahoo Stock Message Boards and the discussion section in Google Finance are a means to know the latest buzz about a company we are unfamiliar with. Here is a list of our subscriptions through Google Reader:


Iteratively this results in a number of running lists of stocks broadly classified by Market-Cap, Yield, and Geography. As means to invest become available, these lists are subjected to further scrutiny. The actual selection of a stock to invest in depends largely on the list from which it is chosen, the diversification it provides and the industrial sectors it falls into.

The next posts under this topic will look into our current list of stocks under different market caps and yield.

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