Canadian investors building or fine-tuning their portfolios need to find ways to choose from between more than 1,000 stocks on this side of the border and about 9,000 in the United States.
There's a lot written about every one of those companies, and that's not even counting the mutual funds investors might choose, says Dan Hallett, president of the independent financial analyst Dan Hallett & Associates Inc.
"I think the key, really, for online research is knowing what not to pay attention to," adds Mr. Hallett, who is based in Windsor, Ont.
Generally, he describes a process that ends with picking a security and transferring cash to your online brokerage to make the trade.
The process includes identifying an investment needed in a portfolio that you have constructed to meet a specific goal and then finding the exact product (such as a single security or a fund) to meet your needs and tastes - and at the right price.
"If somebody wants to have a diversified portfolio they won't find overseas stocks that they can buy online," says Mr. Hallett, who is a chartered financial analyst.
"To get good foreign exposure, you pretty much have to go to a fund."
Some of the strongest research is available on Internet brokerages' websites - some for free, some at additional costs.
Beyond those domains, you can do your basic homework on free websites that focus on investor education, and then progress to analytics on specific stocks and mutual funds on websites, which usually incur a fee.
Getting the basics
A couple of basic sites will help you determine what type of investor you are, clarify your goals, and focus on what general investments you should be looking for.
If you're in your mid-40s and using your online brokerage account to supplement retirement savings, for example, your approach will be different from that of a 25-year-old who is aggressively trading stocks to make a quick cash killing.
Provincial regulators
On their websites, every provincial securities regulator offers quizzes, downloadable booklets and PDFs loaded with investment information, but some sites are better than others. The sites of both the Alberta (http://www.albertasecurities.com/Investors) and Ontario securities commissions (http://www.investored.ca) have updated their sites recently, while Quebec's Autorité des marchés financiers (http://www.lautorite.qc.ca) offers booklets on understanding investments.
SEDAR
Another free website is SEDAR.com (the acronym stands for the System for Electronic Document Analysis and Retrieval), which Mr. Hallett describes as the cornerstone of his Canadian stock and mutual fund research.
The site provides most public securities documents and information filed by public companies and investment funds with all of the provincial regulators for the past 10 years
"Pretty much any time I'm doing research on a fund or a stock, I'm on SEDAR," Mr. Hallett says.
One of SEDAR's purposes is to disclose publicly to investors all of the latest securities information, so the language in all the documents is standardized and relatively easy to read - something that can be hard to come by in the securities industry, Mr. Hallett notes.
Honing your skills
Your online brokerage
Every online brokerage offers a research suite with portfolio-building tools to help you narrow your search for investments. E*Trade, for example, offers a portfolio optimizer that takes investors through a quiz to determine their risk tolerance and invested time horizon. "It helps them decide how their portfolio should be weighted," says Duncan Hannay, president of E*Trade Canada in Toronto.
To help you in your research, every firm offers analytics, tools for comparing stocks and mutual funds, plus its own spin on matters. Royal Bank's Royal Direct offers daily comments from its own equities analysts, for example. E*Trade, which isn't owned by a bank with its own analysts, offers Canadian and U.S. research from such third-party providers as BNY JayWalk, Sabrient Systems and Rochdale Research.
StockChase
This graphically stripped down, basic website (http://www.stockchase.com) offers ratings from Canadian analysts and mutual fund managers based on what they say publicly about various large-cap and small-cap securities. You can search for equities by their names, or by analyst or mutual fund manager. The site makes no pretensions about its limited purpose as "one of the investing tools in your arsenal for wise investing in the stock market," as its disclaimer reads. StockChase reports only on what is discussed by individuals who appear on business television shows, mainly on Business News Network.
Morningstar
Most Canadian investors will know the site www.morningstar.ca in relation to the mutual fund industry, but its Chicago-based U.S. parent, www.morningstar.com, also offers U.S. stock research analysis for about $125 a year.
"That's pretty reasonable," notes Mr. Hallett. You'll find some Canadian company stocks listed on U.S. exchanges. "[The American site] offers the same analysis that they started with on the mutual fund side," he says. The U.S. site offers filters as well as analytical reports, "so you've got some qualitative coverage," he adds.
For-fee sites
Investors will find that many sites such as Yahoo Finance (finance.yahoo.com) and Thestreet.com, deliver a fair amount of original, free content and analysis, but you'll pay upward of $10 (U.S.) and as high as $300 for individual research reports on specific stocks. A complete subscriber service on Thestreet.com costs about $400, for example. Investors might find better value in some of the free insight pieces at Thestreet.com's "university section," which details the basics of value fund management, a lower risk stock-picking strategy.
Fine tuning
Jennings Capital Inc. provides a rare website (http://www.jenningscapital.com) that offers free equity research on about 200 Canadian stocks. Jennings Capital is a Calgary-based independent firm that invests in oil and gas and mining sectors, as you might guess, but also some consumer retail and technology and biotechnology companies. Ten analysts make buy-and-sell recommendations on the stocks for Jennings, and you can access all of their reports online. Limited in scope, but free.
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