We live in the golden age of stock market investing. There is almost unlimited information, and everyone can access it with the right tools.
Even small investors pay next to nothing for tools the best investing tools and information. If you’re an invested in the stock market, these are the five investment tools that you should use.
1. A Discount Brokerage
Unless you work at the trading desk of one of the huge wire house banks, you should use a discount brokerage for all your investing. A discount brokerage will help you minimize or eliminate transaction costs. Less money in the pockets of your brokerage means more money in the market.
The best discount brokerage for you depends on your investing style. Individual stock investors should look to Robinhood for free equity trades. TD Ameritrade and Fidelity offers hundreds of no load ETFs, making those brokerages a good choice for index fund investors.
Finally, e*Trade offers low cost trades for investors who need to buy and sell options.
If you prefer an app, check out our favorite investing apps that allow you to invest for free.
2. Personal Capital
Personal Capital uses an encrypted read only connection to connect to your bank account. Personal Capital analyzes your investment accounts and your spending habits in the same account.
This tool makes it easy to monitor your portfolio’s asset allocation, your 401(k) fees, and even whether you’re on track to retire. Plus, you can budget, track expenses, and get notified of upcoming bills.
Investors need to understand how their personal spending affects their portfolio. Personal Capital will help you make that connection.
3. Free Portfolio Analysis
Every investor needs to analyze their portfolio for risk and opportunity. Some portfolio analysis tools cost a lot of money, but we love two free portfolio analysis tools.
Index fund investors should check out Portfolio Visualizer. The website offers robust analysis tools for free. They have data for backtesting your model from 1972 to the present. The tools also allow you to run Monte Carlo simulations, find historical efficient frontiers, and test quantitative and factor based investing models.
Individual stock investors should use DIY.Fund for the best free portfolio analysis tools. The platform helps investors track trades, calculate risk adjusted returns and conduct quantitative research. It will also help you manage your portfolio as a whole rather than just your individual positions.
FeeX is one of my favorite free tools for examining ETF and mutual fund fees. Why does this matter? Because fees are one of the biggest drags on investment performance over time. Paying too much in fees can cause you to lose out on $100,000s over time.
What makes FeeX so great is how easy it is to use. You simply connect your brokerage accounts, and FeeX analyzes your portfolio and calculates your costs. If there is a similar fund with a lower cost, FeeX will suggest it for you, and show you how similar it is. It will also show you how much you could potentially earn more over time by switching.
Every investor should run their portfolio through FeeX at least once. Check out our full FeeX Review here.
Investors need good information, and in today’s marketplace you can get information for free. For example, Quandl offers free public information, Multpl gives access to the most significant investing variables and Yahoo!Finance offers to the minute stock prices.
But all that information is useless or dangerous if you don’t have the education to use it. I’ve created a free 3-day Investing Course that will jumpstart your educational process. Learning shouldn’t stop there. Take the time to read investing books or take more advanced investment courses.
You don’t have to become a huge investing nerd, but you need to know enough to take care of your money. Your mind is your most important investing tool; take the time to train your brain, so you can maximize your profits.
Have you ever used any of these investing tools before?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.