I first started to be interested in investing ten years ago. I read Wealthing Like Rabbits by Robert R. Brown, The Value Of Simple by John Robertson and Millionaire Teacher by Andrew Hallam. Which are excellent books to grasp the basics of investing, the magic of compounding and the advantages of passive investing. I opened my first account and started investing in what was an early robo-advisor. It wasn't even called that at the time. It was basically a mutual-fund that tracked a couple of indexes. The MER (management expense ratio) was about 1% but it was fine. The consistency and the simplicity of having automatic deposits into my savings account really give me peace of mind.
Over the years my investments started to grow and I had returns of about 7.5%. Then I decided to try to increase my returns by buying VGRO which is a very popular ETF by Vanguard. It had basically the same asset allocation as my mutual fund but I didn't have to pay the 1% MER. Eventually, I realized that I really enjoyed learning about personal finance and investing. I spent a lot of time reading about investing and particularly value investing. I read The Intelligent Investor by Benjamin Graham, listened to interviews of Warren Buffet, Charlie Munger, Peter Lynch. I started doing stock research and looking for undervalued stocks. Maybe I could actually outperform my portfolio of ETFs? It turns out I did.
Building The Product
I'm a software developer, so the urge to automate things is pretty strong. I had Google Sheets with stocks listings plugged into an API. Formulas and dynamic backgrounds and charts, etc. Once everything was dialed in and I was satisfied, I started building the actual product. ValueStocks is essentially a stock picker but the parameters have already been adjusted for you. It will rank the stocks of all the major indices (S&P 500, S&P TSX, FTSE 100, RUSSELL 2000) by their value. In other words, the strength of their fundamentals and their price.
While ETFs are a great option when you don't have the time to research stocks, ValueStocks allows you to target companies within an index that have strong fundamentals and a great price. Instead of buying stocks of lower quality that are included in the index just because of their high market capitalization. I explain this concept in Why ETFs Are Overpriced. I like to think that ValueStocks is all about extracting the juice out of an index.
Focusing On Value Investing
Value investing is all about looking at a company's fundamentals and ignoring short-term market fluctuations. If a company is financially stable and its stock price is low, it will likely increase in value over time. It's a long-term strategy. The numbers don't lie. Don't pay attention to market sentiment, economic downturns, or global events. If a company has strong fundamentals, a good business model and the management aren't clowns, it's a good investment.
Recently, there has been a trend for growth and "meme" stocks. While some people made a lot of money, many investors who followed these trends ended up losing. I believe that investing will shift in the coming years, away from growth-focused companies. Value investing has also stood the test of time.
Chasing high returns can be risky, with the potential for both high rewards and high losses. I prefer to focus on low to moderate risk strategies that still offer a good chance for high returns. The appeal of the next groundbreaking company may not pay off in the long run. The price of this kind of stock is likely to be highly volatile. This increases the risk of making emotional decisions and regret it later.
Conclusion
So finally, if what you read resonated with you, I highly encourage you to sign up for the free 30-day trial. During this trial period, you will have access to the entire S&P 500 listing, which is ranked and curated by the algorithm. Of course, it's important to remember that it's always essential to do your own research and ensure that you have confidence in the company before making any investment. ValueStocks is a tool to help identify great opportunities, but it is not a substitute for research.
If you have any feedback, questions or suggestions, please do not hesitate to reach out to me at renaud@valuestocks.io, on Twitter @ValueStocks_IO, visit the Facebook Page or use the chat bubble once you have logged into the app. I will continue to work on improving ValueStocks and incorporating user feedback in order to create the best product possible. As the saying goes in Québec, "petit train va loin!".