Discount broker TradeKing recently launched a new stock screener, the Strategy Builder, for investors to better choose which stocks to buy based on either self-built criteria or well-known principles. If you are already using TradeKing, you can find the new Strategy Builder in your account under Tools.
Since Strategy Builder is a stock screening tool, what it does is help investors identify which stocks to buy based on certain criteria, some are developed by Recognia based on well-known strategy, such as the ‘Growth At a Reasonable Price’ strategy described in Benjamin Graham’s 1949 classic book The Intelligent Investor; others are provided by individual investors from the TradeKing user community. Each strategy is built on a set of criteria, with some popular ones as stock price, dividend yield, P/E, price/book ratio, volume, and price performance in various time intervals.
I am not an active trader myself. When I did buy stocks, I never used any screening tools because I don’t think I need a tool to tell me what to buy if I only buy a few stocks in a year. Plus, for the stocks I did buy, it was always the case that I knew the company first before buying the stocks. On the other hand, I can see how using Strategy Builder, or any other stock screening tools for that matter, could help those who make a lot more trades than I do. It can reduce the amount of initial research required by narrowing down the number of stocks meet certain criteria to a much more manageable level. However, I still think that a strategy, even those that built on Graham’s principles, can’t replace the human analysis in stock research. As thorough as a screening tool can be, there are still something that are important to each individual investor.
