Sources of Stock Advice

Can provide important personal financial advice

Stock advice and free stock buying tips on which stock to purchase can be obtained from a variety of sources.

It is not my intention here to provide advice on particular stocks, but to concentrate on discussing where advice can be obtained.

Some stock advice costs nothing and other advice costs a lot. You need to tread carefully when seeking advice as fees and charges can seriously erode any profits that may be forthcoming – and the aim is to maximize profits!

How Much to Spend on Advice?

The amount you spend on advice and help with value investing should have some bearing on the total value of your portfolio.

I have worked on a maximum of a 2% spend for advice on a small portfolio (A$5,000 to $10,000) dropping to 0.5% for a much larger portfolio (e.g., greater than A$500,000).

What I am saying is that you need to be realistic in terms of what you are prepared to spend. Keep in mind, however, that these costs may be tax deductible.

I have listed some sources of advice below. This is not an exhaustive list and reflects to some extent where I have obtained advice as a value investor.

Some of these sources offer free stock market information.

I still find it useful however, when obtaining advice from other sources, to do my own analysis before deciding whether to act on the advice.

Here are some sources ...

Online Stock Brokers

Online stock brokers can be divided into two types. Those that provide advice and those that don't. However, the level of brokerage (the fee charged) depends on the amount of advice provided.

Online brokers don’t normally provide advice or share market tips. However, they may provide summaries of advice from a variety of analysts.

Which way to go? It comes down to what constraints there are on your reading time!

Check out the link above to see what other services brokers offer.

Newspapers and Magazines

Newspapers and magazines - while they have their shortcomings, provide articles, recommendations on stock purchases (but usually not on selling!) and useful background.

They also are a useful source of possible candidates for consideration.

From these publications you can glean daily share prices, together with the high and low share prices for the company in the last year, the current dividend yield, the current earnings per share and the price earnings ratio.

Check out the link above for further comments.

Stock Investment Services

Stock investment services - The most common providers of stock investment services are financial advisers.

They have become a somewhat unpopular group following the global financial crisis as many investors believed that they obtained inappropriate advice from them.

In some cases, the problem related to the fact that they did not choose an independent financial adviser and were steered into investments from a related party.

In fact, in some cases, people lost their life savings as a result of following their stock advice.

So it is important to independently check and verify any advice received. There are other important considerations - particularly in relation to financial planner fees.

Shareholders Associations

Organizations that provide stock market basics as well as other stock advice include shareholders' associations.

These associations also represent concerned shareholders in a number of other capacities, including help with investing and providing the stock market basics.

Find out the advantages of belonging to one of these groups by following the link above.

Stock Market Investment Clubs

Stock market investment clubs have become popular with women, as women are more inclined to communicate and share with others. Well ... that's my experience!

They could also be of interest to investors with small starting capital, as some clubs pool their resources to invest.

The clubs come in different versions. The Value Investors, for example, has as its main focus a sharing of stock investment ideas.

So if any of these different types of clubs interest you, check out the detail in the links above.

Stock Exchanges

Stock exchanges have the primary function of allowing stock investors to buy and sell shares. They do, however, provide a number of other valuable services.

One thing they do not provide is direct stock advice.

In some countries there are concerns about the way they operate. For example, the Australian Stock Exchange (ASX) is both a provider of services and an enforcer of rules and regulations relating to share trading.

As the ASX is a listed company in the business of making profits, you can guess which function receives the greatest attention!

There is a clear need for these functions to be divorced from each other.

Follow the link above to see more detail on stock exchanges.

Congresses and Conferences

The Value Investing Congress is a gathering that takes place each year to enable value investors from around the world to network and hear presentations from successful money managers.

A number of value investing conferences are held from time to time in different locations. Check here for the next conference.

Value Line Reports

Value line reports include the Value Line Investment Survey which is available from most large U.S. libraries and stock brokers. A Value Line Mutual Funds survey is also available by subscription.

Value Line is a good source for all the relevant data that most value investors need to know. It also has four model portfolios that cover a range of investor interests.

To Conclude

Knowing where to find information and stock market advice can provide important clues in selecting companies for your own independent analysis.

Being better informed and able to pit your analysis against those in the financial press and elsewhere will make you more aware of the inadequacy of some of the stock advice that is published by 'financial experts'.

A healthy degree of skepticism will serve you in good stead when using financial advice and financial information in your future financial decision making.

Accurately tracking your performance will also help you to evaluate which stock investment advice has been most useful for you.

Do you know how to accurately track your performance? If not, make sure you discover this important aspect of stock investing using the IRR formula.

The related articles below examine the importance of each of the sources of advice discussed above in more detail.

Related Articles

Stock brokers - can provide a range of information and stock advice depending on the amount of brokerage you are prepared to pay. Check out whether you prefer a full-service broker or a 'no frills' broker.

Newspapers and magazines - keep you up to date with the latest financial information and data with limited cost. Libraries provide a range of newspapers and magazines FREE. These publications should be your main source of information. Check out what they provide.

Stock investment services - are provided to a large extent by financial advisers. Are fee-for-service advisers the most suitable for you? Check it out here.

stock market seminars - are provided by shareholders' associations and other commercial organizations that provide stock advice. Check out the range of information provided.

Stock market investment clubs - allow you to pool investment information and expertise - and have a social experience at the same time! Are they for you? Check them out here.

Stock exchanges - provide a wide range of valuable information and services that you should not be without. But what are these services? Look here.

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