A reader of this column wants help with stock research tools; he is particularly interested in free or low-cost resources.

If I were a do-it-yourselfer, I would turn to nonprofit organizations, such as the American Association of Individual Investors (AAII) or BetterInvesting, for low cost, value and their culture of education.

Both of the organizations I’ve mentioned are focused on education, which means a lot to me. Their materials are intended to help you become a more informed investor.

On its website (aaii.com), the AAII offers a number of free products, including webinars. You also can look up any stock for free by entering the company name or stock ticker symbol in the search bar at the top.

Members have the unique advantage of studying pre-built screens that replicate the screens used by noted investors, such as Warren Buffett, Benjamin Graham and Geraldine Weiss, as well as other screens based on performance and on risks and returns, among other themes.

This alone is worth the price of membership, which is decidedly inexpensive. The annual “basic” membership is $49. There also is a “plus” membership at a higher cost. You can find out more about the plans here: aaii.com/join/indexc.

But before taking the plunge, you can sign up for a 30-day trial for a mere $1. The trial will allow you to explore and set up your own screens. It may take you the full 30 days to fully appreciate AAII’s resources.

BetterInvesting was previously known as the National Association of Investment Clubs. The site (betterinvesting.org) also offers free and low-cost educational materials.

BetterInvesting is known for its Stock Selection Guide (SSG). The SSG “organizes a company’s historical financial data to help investors identify the characteristics of quality growth companies and enable plotting of potential future growth from historical trends.” You can take a look at an SSG example at tinyurl.com/yxce68hv.

To get a better feel for BetterInvesting’s resources, sign up for a free three-month trial at tinyurl.com/y4mnu3kz. When you click through to sign up, note the red lettering that shows the membership at zero dollars. (On first glance, the shopping cart shows $19.99, but then goes to zero after applying a 100% discount.) For more information about membership, explore the website.

Once you sign up, you can register for a StockUp, which is a study on a particular stock. For example, on Nov. 10, Costco Wholesale (COST) is the subject of an online program sponsored by BetterInvesting. The program will include a review of the company’s business practices and financial reports. You’ll be able to see how to complete an SSG guide as well.

Armed with the AAII and BetterInvesting, there is no question that you will be a better-informed investor.

Finally, if you are a beginning investor, you may be interested in a free virtual presentation I am giving as part of the Investment Basics series sponsored by the Greenwich (Connecticut) Library. The topic: “Why a Portfolio Review Is Important and How to Do It.” The date and time: Thursday, Nov. 12, at 10:00 a.m. To register, go to tinyurl.com/yy3fu4qp or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

Known as the “Big Five,” five questions can predict your ability to make good financial decisions. This is the conclusion drawn by researchers who conducted a study between 2012 and 2018 of 1,500 Americans to test basic financial knowledge.

The study “represents one of the nation’s first efforts to collect and analyze longitudinal data linking financial literacy to the financial outcomes of individual Americans over a multi-year period,” said FINRA (Financial Industry Regulatory Authority) Foundation President Gerri Walsh. Longitudinal studies follow the same people over a period of time to see what changes occur.

The FINRA Investor Education Foundation (FINRA Foundation) conducted the study together with the University of Southern California’s Center for Economic and Social Research, and The George Washington University’s Global Financial Literacy Excellence Center (GFLEC).

The research brief, “The Stability and Predictive Power of Financial Literacy: Evidence From Longitudinal Data,” was released Thursday.

Researchers concluded that “financial literacy has significant predictive power for future financial outcomes, even after controlling for baseline financial characteristics and a wide set of demographic and individual characteristics that influence financial decision making.”

The Big Five cover topics related to everyday economic and financial issues like risk diversification, how interest affects savings accounts and mortgages, and how inflation works. The questions were developed by the FINRA Foundation National Financial Capability Study (NFCS).

Researchers found that answering one additional question correctly (for example, answering two questions correctly instead of one) in 2012 “increased the likelihood that a respondent could meet a $2,000 unexpected expense in 2018 by 8%. Answering two questions correctly increased the likelihood by 16%, and three by 24%.”

The study focused on six different financial outcomes, three positive and three negative, and found that financial literacy in 2012 was “not statistically related to any of the negative financial outcomes documented in 2018, such as costly credit card behaviors or the use of alternative financial services, including auto title or payday loans, rapid refunds, pawn shops or rent-to-own shops.” The positive outcomes included being financially satisfied, planning for retirement and handling the $2,000 unexpected expense.

From my perspective as an advocate of financial literacy education, these are momentous outcomes. They underline the interplay between financial literacy and the ability to make good financial decisions.

From my perspective as a money manager who focuses on retirement portfolios, I am encouraged by Annamaria Lusardi’s comment: "We found that people with greater financial knowledge were more likely to plan for retirement and be able to cope with a $2,000 unexpected shock. Financial education and workplace financial wellness programs need to be fundamental pieces of rebuilding the financial well-being of Americans." Lusardi is the academic director of GFLEC and a professor at George Washington University.

I’d like to see more engagement with young people just starting their working careers to teach the value of saving early and the benefit of compounding over a long horizon. I’d also like to see financial basics taught at the grade school level. Everyone needs to learn how to save and invest for good reason: Someday they will need to create retirement income.

Share this link of the Big Five questions (surveymonkey.com/r/Big5FinLitQuiz) with your family and friends. Three of the five questions made up the “Big Three” survey, which I wrote about in February. Everyone should know the answers to these five questions.

On another note, I invite you to join me at a free virtual presentation, “Why a Portfolio Review is Important and How to Do It,” on Thursday, Nov. 12, at 10:00 a.m., sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/yy3fu4qp or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

When I speak with investors, whether they invest on their own or with the help of financial professionals, I’m always curious about how they monitor progress. How do they know they are on track? How do they judge performance? Are they happy with the results?

Some tell me they only have time to quickly compare their current brokerage statement balances with earlier balances to get a sense of performance. Being ahead is better than being behind.

That leaves me wondering even more. Is that enough? To give you context, some (not all) financial firms do report performance to their clients in a way that addresses goals and how they are being met on a risk-adjusted basis. That is, they report to clients on a regular basis on progress being made or not made and the risk taken on to achieve that progress.

Before one can do that, goals need to be identified. Very simply: What are your goals, and what’s the path to reaching them?

If you are not making that type of assessment, I challenge you: It may be time to redefine your job as an investor to include a strategic plan that you can use to measure your progress toward one or more specific goals.

In the financial industry, that is achieved through an investment policy statement, or IPS.

Very simply, an IPS is a statement of goals, how you plan to reach them and how you will measure progress to make sure you are on track.

While an IPS is usually a document that an investment firm provides clients, there is no reason you can’t have one for yourself if you are investing on your own. Everyone who wants to be a successful investor needs to have a formal or informal IPS.

To get started on your own, I recommend Morningstar’s Investment Policy Worksheet, which you can find online at tinyurl.com/y5xgkr9r.

The worksheet takes you through six sections: 1) a summary of where you are currently, including how much of a loss you can “accept” over different time periods; 2) your financial goals; 3) your investment philosophy, which goes into what is important to you as an investor and your assessment of risk; 4) your philosophy about taxes; 5) your investment selection criteria; and 6) your monitoring procedures.

Yes, monitoring comes at the end, after considering all the other factors that drive the success or failure of an investment program, including the very important element of risk. How else could you possibly know if you are on track?

Returning to my discussions with investors, over the years, I have found that when talking about performance, risk is not mentioned. Someone who goes through the IPS process will need to address risk and have a sense of what to do in a rapidly declining market such as we experienced this year, when the S&P 500 Index fell 34% from Feb. 19 through March 23.

To learn more about the IPS, an excellent publication comes from the CFA Institute. The institute is a nonprofit whose goal is to build a better world for investors. The publication, “Elements of an Investment Policy Statement for Individual Investors,” is available for free online at tinyurl.com/yxehcgwm.

On another note, no matter where you are located, I invite you to join me at a free virtual presentation, “Investing in a Coronavirus Stock Market,” on Wednesday, Oct. 28, at 10:00 a.m., sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/y36nzo7n or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION