Forget Online Dating – Stock Screeners Will Find the Perfect Match for You

stock investing

These days, it seems as though everyone has taken to the internet to find their soulmate. Long gone are the days of carefully vetting your perfect match by sitting in a cafe or a bar and trying to get to know them better. Not only does nobody have time for such antics, but trying to find mister or missus right the old-fashioned way is both high-risk and inefficient.

And no doubt, the absolute same can be said for the stock market. Who has time to waste on overvalued, poorly performing securities when there are so many more out there to choose from?

Now, it’s important to make a careful distinction here: Just as you’d want to make sure you carefully interview your date to make sure they’re not secretly a serial killer, you also want to employ the same level of due diligence when picking your next stock trade, as well.

Any security can look great on paper, just like how a first impression can seem promising when looking for a significant other. But the moment you decide to commit to them and invest a significant amount of capital into them, that’s when things can quickly start to go sour.

That’s where stock screeners step in. Not unlike a dating application for online matchmaking, stock screeners play a similar role for traders. Simply plug in your requirements (as well as your non-negotiables) into the app and, just like how you’d narrow down your choices in a potential partner, you can also do the same for securities.

However, instead of entering in height, eye color, or other preferences, you’ll choose the price, valuation, and similar criteria. It really is that straightforward.

How Do Stock Screeners Work?

Before you get started with using stock screeners, it’s first essential to understand how they work and how to use them. After all, depending on your investment needs, certain stocks may be a poor fit for you and your portfolio.

Before you begin, you’ll first want to narrow down which stock screener you’d like to use. With so many different ones out there, you have your choice one which is the best for you. You may want to start with a free or low-cost one, then move toward one that has a higher subscription fee.

Stock screeners work by allowing you to set specific criteria in your search for a new investment for your portfolio. For instance, you may only want to choose stocks that trade on the New York Stock Exchange (NYSE).

Or perhaps you want only to include stocks that have a higher or lower trade volume. One important consideration is the price of the particular stock or even its market cap. Each of these criteria can be selected in your stock screener, giving you the control you require before moving forward with an investment.

Getting Started With Stock Screeners

Once you know what kind of stock you want to invest in, your next step is narrowing them down with the aid of your stock screener. There are several things you can look for when trying to select your next stock investment.

For instance, you can methodically cull through its extensive database of companies to determine which variables matter the most to you so you can invest more sustainably. Then, from there, you can use the screener’s engine (which isn’t unlike your favorite online search engine) to pinpoint which companies meet your requirements.

Penny Stocks, Small Cap Stocks, and You

One popular use of stock screeners is to find new penny stocks to invest in. That said, it’s important to clarify a distinction here — just because they’re called “penny stocks” doesn’t mean that they trade for just a handful of coins on the stock market. Instead, it means that these securities typically trade for an average of fewer than $5 per share.

For instance, if you’re wanting to find stocks for under $2, your stock screener can quickly identify and single out those more affordable securities for your convenience.

Conversely, small caps stocks are the opposite of this. These stocks typically have a small market capitalization (anywhere between $250 million and up to $2 billion) and trade at a minimum of $5 per share. Unlike penny stocks, they are generally traded on the NYSE.

While there’s no right or wrong answer as to which type of investment you should put your capital into, many novices prefer penny stocks because of the minimized risk and lower cost of entry. Regardless, using a stock screener can help you narrow down which type of stock you can invest in next.

Are Stock Screeners Right for Your Needs?

Regardless of the amount of capital you have on hand, introducing a stock screener can make a huge difference in how you invest. Whether you’re a casual day trader or you’re a devout buy-and-hold position trader, a stock screener can dramatically improve the way you approach the stock market.

And, just like you might use an online dating app to find the person of your dreams, your screener can do the same for your portfolio, finding the right security for your needs — and who knows? You just might find it to be an overall more low-risk, enjoyable venture for yourself, as well!

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