I’m interested in starting to learn about the stock market, bonds, and investing in general. I was thinking about signing up for one of those “follow stocks for a few weeks” websites to learn about them. Anyone know of any good websites for someone completely new to it? I literally know nothing about it…
Oh yeah… and, I made my first donation to LAF today. Feels good!
I might be ‘old school’ but unless it’s guaranteed fixed income (bonds, for example) I won’t touch it with a ten foot pole, I know plenty of people who lost A LOT of money by ‘investing’…
I believe the title is: The Investment Bible. Black/yellow colored cover. Availabe at Barnes Noble. It is more indepth than a “investing for dummies” type of book, but not so heavy that you can’t understand. Great book to read, I recommend highlighting or taking notes.
If your investements are geared primarily towards retirement, they make a similar book called: The Investment Bible. Geared more towards retirement issues.
Oh great! Way to start an OT argument. Power Cranks, Bush, Iraq, TSR, SUV’s, Fixed Income.
i’ll look into it… thank you very much.
somehow I wouldn’t necessarily trust all mutual fund managers, as it seems for example lots of them played sheep during the .com boom/bust and thought more about their commissions than to the long term perspective…
heck, I remember chatting with a guy from an investment company back when we were approaching the .com peak (and I had the feeling things were way overvalued) and I asked him to recommend me a good ‘precious metals’ mutual fund and he basically laughed me off telling me that high-tech was the way to go… of course the high-tech mutual funds cratered in the next year or so and the precious metals one made tons of money as everybody tried to buy gold to be ‘safe’.
If you have significant $$$ on the other hand I betcha that there are probably better mutual funds around (with higher barriers-on-entry, say, minimum investment of $100,000) overseen by really competent folks… but again, beware people that promise you guaranteed high returns (high = above 10-15% yearly) as there are plenty of swindlers around in the financial market as well.
www.fool.com - they also write books. (I’m serious)
Remember that most self-managed portoflios do pretty terribly over the long run (see volatility)
also, for vocabulary bookmark www.investopedia.com
thanks for the tips… i’ll look for financial peace and see what it’s all about.
never taken any classes on finance in school. just thinking about the future and i don’t want to be one of those people working into their 80’s (if i live that long!). just want to be smart about things and learn the ropes for right now.
as for mutual funds - i would probably feel safer about them to begin with (compared to stocks). but, i’d like to learn about both (just to know my options). thanks for your input.
haha… i already have investopedia bookmarked. i had been searching this stuff on google and came across it. good site.
i’ll check out fool.com (never heard of it).
Investment analysis pretty much begins and ends with Benjamin Graham - Warren Buffett’s mentor. His two books, “Security Analysis” and “the Intelligent Investor” are generally regarded as bibles of value investing. The former is fairly difficult to read and long - I don’t know any professionals in the industry who have actually read it. The latter is a bit more accessible, and annotated. Either way, they both cover important principles for investment analysis. It also helps if you have a decent background in finance. Otherwise, I would consider investing in a fund.
That said, Graham’s influence has touched a significant group of fund managers, including Buffett, and other value managers such as Tweedy Browne. Bill Miller at Legg Mason also has a significant track record of beating the market. Marty Whitman and John Neff are also big names in this area. In general, value investing as a whole has outperformed the overall equity markets with a lower risk profile.
Overall, you need to develop an allocation strategy between fixed income, cash, and equities, based on your risk profile and tolerance for loss. Within equities, however, if you don’t have the time or inclination to either invest in individual issues or vet different investment styles, you’re probably best suited for index funds with low costs, such as those run by Vanguard. That way, you can largely mimic the market at a minimal expense.
Yes. www.fool.com is great! Great basic info, and free.
Index funds are good. I agree with Matt. If your just looking to start investing as a savings plan, avoid individual stocks.
1/2 of what I do for a living is investing. I think you’ll be able to find alot on the web. When the market is greedy (1999) be fearfull, when the market is fearfull (2001/2002) be greedy. Good luck, educate yourself, find a good non fee based planner and pick a strategy and stick with it.
The only way you’ll learn is by either getting involved in the various markets on a p.a. basis or working in the industry. A degree of fanaticism is also required rather than just a passing interest. Have a look for a book called ‘Market Wizards’ for a general overview of various successful traders. You may also want to have a browse on the forum at www.wilmott.com to see what kind of guys you’ll be in competition with.
Unless you’re particularly gifted, fanatical and have cash to lose - stick it in the bank. Ultimately, it’s just gambling. See how many ‘top’ analysts make the right calls.
My justification of the above: I’ve just resigned from an equity fund that used an option overlay with currency hedging to mitigate risk and have previously been an offshore private client investment manager and fixed income trader at one of the largest global (US) IB’s.
If you’re lucky and your company offers a 401 (k) or similar retirement savings plan, look into it. I found it to be a good way to get started investing, my contribution is pre-tax, and my company matches my contribution to boot.
It’s also given me access to a lot of information and resources from the investment company that manages our program.
Another recommendation for the fool.com. Tons of good info. Basically, since you are so young I would recommend learning as much as you can first. While learning invest in index funds, but look around for low rates.
The vast majority of funds will underperform their relevant index fund. Typically this is because of the fees that they charge. As an example, the advertisements that you see regarding funds on TV, well the investors of that fund pay for that.
Although reading your response about losing money, if you definately don’t want to lose money then just put it in a money market account, CDs, T-Bills. Everything else has risk, even bonds.
One more thing, acting on investment advice from an internet forum is akin to receiving medical treatment from a stockbroker. Take everything you read here with a pinch of salt - some people are very wrong in respect of risk and charges associated with various packaged products. There are plenty of widely held misconceptions that serve to keep the finance industry in new shoes (and bikes in my case).
Be warned.
Find an experienced friend in the industry and probe them with any specifics.
One must read is ‘A Random Walk Down Wall Street’:
It’ll give you a good, broad education and steer you clear of certain investment philosophies.
Also, look into Exchange Traded Funds like those at www.ishares.com, in lieu of mutual funds. They generally have lower expense ratios, trade like stocks, and are more tax-efficient. You can find out more about them at www.fool.com, which someone else recommended, and I’ll second as a great online resource.
Some more subjective advice, unless your company matches funds in a 401k, I’d open up a Roth or Traditional IRA (depends on your income bracket and future expected cash flows) instead. Your choices are generally better than the high fee funds that are typical of 401k’s, and with people switching jobs all the time, chances are you’ll end up rolling a 401k into an IRA at some point anyway. And invest for retirement early rather than late. The difference in compounded growth towards the end of your working days is huge if you invest earlier.
Here is another one for www.fool.com. They explain things well and give good advice.
Send me your $$ and I’ll take care of you!!!
Actually it is fairly easy if your just wanting to do mutual funds or stocky.
Read up a bit on investing on the sites already mentioned.
If you are in it for the long haul - go blue chip stocks or very big names. Their price per share will fluctuate, but they will consistently pay dividents and you should simply re-invest them.
Get on a plan to put $XXX into your investments each month = dollar cost averaging.
Use a large no-load broker unless you want guidance, then that will cost you.
The comments about a company 401K - perfect. That would be my suggestion about very first place to start. Once you have gotten everything from the company in regards to your contribution requirement to get the company maximum match, then with extra $$ you have think about other investment options (stocks, bonds, mutual funds)
If this is long term investing, don’t watch your funds every day - it will drive you crazy