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Originally Posted by Krovikan
Are there good resources to learn more, my portfolio at this point is too small, I figure ETF and one stock trades are my best bet. But I would like to understand more about what I'm doing.
I use Investopedia.com if I don't understand a term, but doing more research, I find most self-help sites or videos (YouTube and Udemdy) are just trying to pump and dump stocks or are hawking bad education courses.
Right now, my TSFA at around $5k and I have an even split between complete gambles (ETHC, for example) and ETFs or undervalued stocks (Low Price to Book and positive EPS). For the second half, I feel like I can do better on the stocks, as my ETF positions are up 28% over the last 6-months (I am new to ETFs) where the stocks are sitting under 10% return generally.
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I'm going to go on a limb here and say that you know more than probably 2/3 of all people that actively/passively trade without a financial adviser or stock broker and the problem is a bit more along the lines of information overload. My TFSA portfolio is a bit bigger than yours, but even I don't use the ratios to determine stocks to purchase... and I have a business background and am very familiar with these ratios and how to calculate them.
I personally rely much heavily on income statements, balance sheets, price history and basic industry/political info/gut feelings on long term viability of profitability when I purchase stocks. I feel like many people already use the ratios approach to the point where I rarely see major spreads to exploit... But there's no real perfect answer. It's kinda like the story of the blind men and the elephant, each using a different method to try and illuminate an object they cannot fully see. It always seems like anyone with any method gets blindsided on occasion by some other data point or analysis somewhere sooner or later.
There's a ton of stock billionaires that have different approaches. I like Warren Buffet's approach though which (hopefully not over simplified) is a long term projection and hold evaluation approach. He also likes stocks in companies that are more tangible scaling of growth rather than other stocks that are a little more speculative. I also don't have a huge interest in this type of stuff in the same way many other do so I check my portfolio something like every 2-4 weeks for a few days and then completely forget what's going on.
$5,000 might seem small, but 5 stocks at $1K each is actually enough to set yourself up with a reasonably basic diversified portfolio. I personally usually transact in increments of around $1,000-1,500. I think I started circling back and adding increments to existing stocks once I exceeded $15K.