Your U.S. Investing Education Center

How to research and analyze the U.S. markets

Part of what makes the U.S. markets so attractive is the large and diverse selection of stocks to choose from. Of course, this can also make it a bit overwhelming when first entering the market. Fortunately, the top-down approach to stocks selection starts with the big picture, and works down to help you easily find stocks that fit your needs. 

So you would start by looking for which of the 11 different sectors is showing a favorable trend.

From there, drill down to a specific industry, and even further to sub-industries. Then compare a few candidates by focusing on the criteria that matter most to you, whether it’s for capital appreciation or income.

So what does that look like in practice? For Schwab clients, we’ve made it easy to follow this top-down approach in just a few easy steps. 

Start by logging in and accessing the sectors overview. 

Here, you can easily get a quick overview of how Schwab thinks each sector will perform for the next 3 – 6 months, relative to the overall market. These outlooks are created by a group of seasoned investment professionals and are updated every two weeks.

Then turn to Industry Performance to compare how smaller slices of the Information Technology industry have been performing.

Once you have a list of potential candidates, whittle down even further with Screeners that help you compare using the criteria most important to you. 

To learn more about finding trade opportunities in the U.S. market, visit the Investor Education tab of the Schwab International website. 
 

There are two primary methods for analyzing investment opportunities in the U.S. 

The first is fundamental analysis, which is typically for longer term investments and takes into account the most basic aspects of a company’s financial strength at that moment. 

This approach focuses on things like the company’s growth rate, growth potential, income, revenue, and even things like management structure.

Then there is technical analysis, which is typically for shorter term investments. This form of analysis focuses on patterns within stock charts to forecast future pricing and volume trends. 

Some of the metrics that technical analysts tend to use include price, market capitalization, momentum, and moving averages. 

It’s also important to note that some investors use bits of both methods. 

But how do you actually perform these types of analysis? As a Schwab client, you can log in to your account to access a wide range of helpful tools, particularly screeners.

We’ll start with fundamental analysis, screening by criteria that reflect past growth and strong predictions for future growth, such as Revenue and Earnings Per Share. 

Then we can narrow it down further with ratings screeners. Here we’ll look at Schwab Equity Ratings, an A through F letter grade that reflects Schwab’s six-month outlook on stocks. 

As you can see, we’ve already quickly narrowed the world of possibilities down to a few to dive further into.

Now we’ll progress to technical analysis, where we’ll look at the price chart for one of our candidates.

Here we’ll apply chart overlays to start scanning for patterns in price movement. 

Using things like support and resistance, trend lines, and moving averages, you can start to look for breakouts and pullbacks that may represent good times to make a trade.

To continue learning about technical analysis, visit the Investor Education tab of the Schwab International site. 
 

If you're looking to quickly get started investing in the U.S., the simplest way may be to stick with what you already know.

If there are investing strategies you are already comfortable with, they may be easily applied to the U.S. markets.

Perhaps you prefer to screen for stocks nearing price highs, expecting a pullback.

Or perhaps you keep an eye on dividend growth, looking for stocks poised to grow while paying dividends.

For many of these types of common strategies, pre-defined screeners can help you quickly find potential candidates. And for Schwab traders, you can even customize them to fit your precise needs.

After logging in and navigating to screeners, you'll see a list of the most popular predefined screens.

Once you make a selection, you’ll see a list of candidates that fit the pre-defined criteria.

To further customize your search, you can adjust the criteria…

…or add additional screens.

Now you can select up to 5 companies to directly compare. As you scroll down you can easily see important fundamental and technical information for each side-by-side. 

Then you can dive in to learn more about an individual company, and easily place your trade. 

To continue learning about finding investment opportunities in the U.S., visit the Investor Education tab of the Schwab International site.