Here’s our Mailbag email: investingclubmailbag@cnbc.com . Send your questions directly to Jim Cramer and his team of analysts. Make sure to read our weekly Mailbag dispatch to see if your question is one of the ones we pick to answer. Reminder, we can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. This week’s question: You say “buy and homework” and that an at-home investor should have no more than 10-15 stocks due to it being difficult to keep up with the homework if limited on time. What exactly do you mean by homework? Thank you for all you both do! — Mandy M. Jim Cramer said investors should gain as much knowledge about their portfolios as possible. That means listening to earnings call with investors, looking at financials, reading research reports and corporate news. “You aren’t up there begging at the Goldman Sachs library for some microfiche statement from three months ago, as I did four decades ago right down the block here,” Cramer said. You have everything right at your fingertips.” One good place to start is to review a company’s investor relations page and signing up for updates on any corporate announcements. You should also get familiar with the SEC’s EDGAR platform , where you can check for material updates. Installing an RSS feed reader app — some are free, while others require subscriptions and more advanced tools and features — will monitor updates for you. Once you have an app or browser extension installed, simply search the stock ticker on Edgar, click “view all filings,” then click the RSS feed button and you’ll be prompted to follow the feed. Good sources of business news and information include CNBC, Bloomberg and the Wall Street Journal. You can also go more industry-specific. For example if you’re invested in the airline industry (or supply chain names) you might want to keep track of TSA data . If you hold a position in a Chinese casino like Wynn Resorts (WYNN), monitor the monthly gross gaming revenue trends for the region. Invested in a restaurant? Check food prices as they represent a key input cost; a commodity market watchlist may help here. Bookmark the U.S. Energy Information Administration website if buying or already in energy names, as well as the IEA . We’re also fans of RBN Energy . There’s just a ton of great information out there, most of it online and much of it free. We wrote about 5 ways to get started on your research. This homework must occur before you buy the stock of a company — and, equally important, once you become a shareholder. Ultimately, doing the homework just means that you are taking the time to stay on top of every name you own. Our rule of thumb is an hour of homework a week for each stock in your portfolio. Some companies require less digging. You probably don’t need an hour every week to monitor Apple (AAPL) simply because it is so well-covered (both by analysts and news organizations) that you’ll likely be able to stay up to date by reading the daily news headlines and maybe allocating an additional 20 to 30 minutes on weekend just to be sure you didn’t miss anything that went under the radar. Companies that aren’t household names like Danaher (DHR) and Linde (LIN), on the other hand, are probably going to require you to do a bit more of your own digging. You may also consider owning fewer stocks, perhaps allocating some money to exchange-traded funds (ETFs) or mutual funds. ETFs are a great way to passively fill in the gaps of an actively managed portfolio. For example, if you are actually interested in and enjoy reading up on the technology sector but not as much on health care or financials, you can always pick a few individual tech names to bet on while allocating other funds to a financial or health-care-oriented fund to stay diversified. Buy and hold just isn’t enough when it comes to investing in individual stocks. If keeping up with the homework is too overwhelming — and that’s perfectly fine, it can be a lot to commit to what is essentially a second part-time job — consider ways to reduce the burden before giving up completely. After all, the Club is here to do the homework on the names we own for you and keep you informed. We also don’t have to be your only investing companion: Getting a group chat going or a weekly meet-up with friends and family that are also interested in the markets and investing is a great way to stay up stocks. At the end of the day, you don’t need to be a hedge fund. As long as you have your money working for you in some way, you’re on the right path. Remember at an average return (including reinvested dividends) of about 10% annually, even the most basic, passive strategy of investing your money in an S & P 500 index fund would have doubled your money every roughly 7.5 years over the past several decades. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Here’s our Mailbag email: investingclubmailbag@cnbc.com. Send your questions directly to Jim Cramer and his team of analysts. Make sure to read our weekly Mailbag dispatch to see if your question is one of the ones we pick to answer. Reminder, we can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries.
This week’s question: You say “buy and homework” and that an at-home investor should have no more than 10-15 stocks due to it being difficult to keep up with the homework if limited on time. What exactly do you mean by homework? Thank you for all you both do! — Mandy M.