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Computerized Investing > September/October 2008

Stock Screening & System Backtesting With Zacks Research Wizard

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by Wayne A. Thorp, CFA

Stock screening has become a popular means for individual investors to identify potential investment candidates. This type of rule-based investing involves applying a set of quantitative filters to a database of stocks to isolate those companies that meet or pass the various filters. For example, a value-based filter may search for companies that rank in the bottom 20% of the stock universe in terms of price-to-book-value ratio.

Many Web sites offer stock screening modules, which vary greatly in their sophistication and fee structure. The comparison article in the May/June 2008 issue of Computerized Investing highlighted 10 on-line stock screening services. This article is available on-line at the CI Web site (www.computerizedinvesting.com).

For most investors, the goal of investing in individual stocks is to outperform the broad market or some index mutual fund. The Stock Screens area of AAII.com tracks the performance of over 50 different stock screening methodologies using our Stock Investor Pro program. We arrive at the performance of these different screens through a process called backtesting.

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Discussion

Kurtis from NB posted over 3 years ago:

I used to think that Zacks RW was all there was. But for the high cost, survivorship bias issues, limited functionality... I wasn't thrilled with the value.

Portfolio123 on the other hand is less than one-fifth the cost and does not have survivorship issues, advanced backtesting, and simulated portfolio testing that I have only seen on institutional grade software, and works very well with the AAII.com website.

The site lets you test it out for 30 days - you can bump that up to a 45 day trial if you use the code HKURTIS


Robert Piantoni from MA posted about 1 year ago:

They claim 26% annual returns from 1986-20012 by buying thier # 1 ranked stock and selling it when it is no longer #1. Do you think this will work well in the future and what will it cost.


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