<p>Hi everyone. I was wondering if i could get any help here. IM basically trying to get as much knowledge as possible about investment.I was wondering if I could get ideas of books which are made for beginners in this field. Thanks a lot for your opinions.</p>
<p>Are you investing for college? Retirement? To buy a house? General savings? Your methods for saving/investing depend on the time frame of when you will need the money. </p>
<p>Suze Orman writes books that are practical and easy to read. Look for her books on Amazon.com or in Barnes & Noble.</p>
<p>If you spend time reading 1 year’s subscription of Money Magazine, you will be quite well versed in investment for beginners.</p>
<p>My favorite is probably Andrew Tobias’ “The Only Investment Guide You’ll Ever Need”. Easy to read and a great deal of common sense info.</p>
<p>Agree with Erin’s Dad’s suggestion. I’ll also suggest most of Peter Lynch’s books, and the Motley Fool’s Investment Workbook. The Motley Fool’s website is good, too.</p>
<p>Benjamin Graham’s Intelligent Investor is good once you’re beyond Tobian, Motley, and Lynch.</p>
<p>You might look into starting or joining an investment club. I found that a great way to learn more about investing and put it into practice. Check out [Better</a> Investing - We’ll Show you How!](<a href=“Investor Education, Tools and Publications | Better Investing”>Investor Education, Tools and Publications | Better Investing)</p>
<p>Annual reports by warren buffett, second rec about II by Graham. Dont waste your money on Suze Ormon or Money Magazine. Best bet is to find a local Edward Jones or old AG Edwards office and follow their advice. Investment clubs are notorious for social events and buying what has already gone up. </p>
<p>Look at Capital Research and Franklin Templeton as money mgrs. Good luck and dont make your learning curve very costly.</p>
<p>It is quite simple. Time is your best friend. My wife and I never made more than $150,000 any one year and typically far less, yet we saved every year and acquired a net worth in excess of $2,600,000 and investment assets in excess of $2,200,000.</p>
<p>Max out the IRA’s every single year. Invest in a broad range of mutual funds. And do not attempt to time the market, ie keep fully invested.</p>
<p>It is not rocket science.</p>
<p>swish, sorry, I have to disagree with you about investment clubs. A good one is a great way to learn about investing. Of course some clubs are better than others; one way to make sure a club meets your needs is to start one yourself. I set up one up that was designed to exist for three years; the stated goal of the club was education. By the time the club disbanded, every person in the club had purchased stocks for his/her individual portfolio and felt much more confident and was much more informed about investing.</p>
<p>“Random Walk Down Wall Street” is must reading for newbies in investing. The author just published a new additions. </p>
<p>I teach an introductory finance class for non-financial types and found this book to be the best for solid background on the markets.</p>
<p>I strongly disagree with swish14’s advice. Brokers are the LAST place to go for financial advice. They make money from commissions. Guess who pays those commissions? and swish has suggested load funds! </p>
<p>Most honest investment professionals will tell you that there are only a few “secrets” to investing.</p>
<ul>
<li><p>invest for the long term. A short term focus kills you with trading costs and missed opportunity. Following the trends or following the “hot hands” (such as investing in the funds listed as the “top performers” in magazines) will not serve you well.</p></li>
<li><p>diversify your investments. For example, if you want to play in the stock market, don’t invest in individual stocks. Instead, invest in a well diversified fund like an SP 500 or Wilshire 5000 fund. Lack of diversification is a common problem with investment clubs, as is lack of professional expertise and data.</p></li>
<li><p>keep your cost low. This means choosing index funds from providers that do not have sales charges (that knocks out the Capital Research funds) and have low annual expenses. Vanguard and Fidelity specialize in these kinds of funds.</p></li>
<li><p>don’t try to beat the market. Chances are you won’t.</p></li>
</ul>
<p>A bit of background:</p>
<ul>
<li><p>fund managers, folks who spend full time trying to beat the market benchmarks, who have access to information individual investors often don’t, and who receive huge bonuses for beating the market, often can’t beat the markets. Do we think we are smarter than these investment pros? Do we really think our investment club has a “unique” insight that the pros do not?</p></li>
<li><p>if you sum together all mutual funds, they under perform the market roughly by the amount of their expenses. This is no surprise if you realize that the universe of mutual funds largely makes up the markets, especially for stocks. Individual holdings are a rather small percentage of the total. There are on occasion funds that outperform, of course, but finding a fund that will outperform the market with consistency is extraordinarily difficult. Past performance IS no predictor of future performance. This can be and has been studied, and is true.</p></li>
<li><p>all too often, individual investors use the wrong benchmark. Whether or not you made money in a time period is not a good benchmark. The question to ask is whether a less risky strategy would have made more money. For example, say you made 10% in a given year. But the SP500 went up 15% that year.</p></li>
</ul>
<p>Wow, I haven’t thought about A Random Walk Down Wall Street since the early '80s when I was getting my MBA! It was considered a well established foundation book then.</p>
<p>A new investor should not be reading crap like A Random Walk Down Wall Street. I have lost count of the number of experienced investors I know who regularly beat the market. The book is outdated garbage and not for new investors.</p>
<p>Although plenty of people can time the market, new investors rarely can do so. I suggest new investors use dollar cost averaging with no load mutual funds. That means if you have $10,000 to invest, do not invest it all now. Invest $2000 this month, $2000 next month etc. Or chose some other combinations of dollar amounts and number of months. The point is don’t invest it all at once. (I say this even though I think the market is about to start rising again). </p>
<p>When selecting a mutual fund in which to invest find one that put a lot of his funds in stocks paying dividents or has bonds generating income for the fund.</p>
<p>razorsharp, </p>
<p>Of course someone learning about investing should read “A Random Walk Down Wall Street.” Also “Beating the Street,” “One Up on Wall Street,” and “The Beardstown Ladies Common-Sense Investment Guide,” despite the flaws in the Ladies accounting. All of these, plus the previously mentioned books, are excellent for those seeking to learn more about investing. </p>
<p>newmassdad, </p>
<p>Investors can certainly beat the market with individual stocks. (How else is one going to beat the market?!) I hold mutuals – mostly index funds – but have a small IRA that I use for individual stock picks. My individual picks as a group have consistently beat the market, and I’m a pretty conservative investor. I benchmark against the S&P 500; if I didn’t consistently beat that index, I wouldn’t hold individual stocks. One need not hold a lot of stocks to have a fairly well-diversified portfolio, especially if one also holds other investments (such as index funds). I have five individual stocks now.</p>
<p>I agree with your other advice, but please don’t discourage people from learning how to invest in individual stocks. So long as they appropriately benchmark their results and act accordingly, they may well beat the market quite handsomely. After all, individuals aren’t under the restrictions that fund managers are under. SYK’s my best stock – anyone buy a hip recently? 
– and that accounts for about 40% of the value of my little IRA. (That would be crazy if the IRA were all my investments, but over all my holdings, SYK accounts for only a very small part of my worth.)</p>
<p>I started using the little IRA for my investment education because I knew that were I to lose all of it to bad investments, I’d still be okay financially (yeah, it was that small an amount!). Now that I’ve been picking my own stocks using that money for 10 years, it’s grown into real money, enough so that I’ve been a real pantywaist about it and not been quite as adventurous as I might be!</p>
<p>So now I have to start with another IRA that doesn’t have a whole lot of money in it… :)</p>
<p>
You just contradicted yourself and you don’t even realize it. </p>
<p>There are plenty of good books for new investors. A Random Walk is not one of them.</p>
<p>OK. Razorsharp and owlice are those rare individuals who are smarter than the investment pros. My hats off to these geniuses. :)</p>
<p>For the rest of us, I stand by what I said, modified to accommodate these two: individual stocks are the domain of the financially brilliant and financial fools, IF our goal is to consistently make money. (individual stocks are great if you want to have fun, just like lottery tickets, but maybe with odds a little bit better!) For the rest of us, low cost diversified funds should be the way to go. </p>
<p>Frankly, I don’t have time to waste arguing with finance amateurs. </p>
<p>Good luck all. I will bow out of this discussion.</p>
<p>First ask yourself what type of investor are you? Everything you read or hear is another person’s opinion of what you “are”. What if they’re wrong about you? </p>
<p>There simply is no “good” or “bad” investments, there’s what works for you and your tolerance for risk. </p>
<p>Understand this premise as well… EVERYONE IN FINANICAL SERVICES GETS PAID! just cause you bought into the concept of a no-load, doesn’t mean the ongoing expenses on the entire amount won’t turn out to be greater then the load you skipped paying on your initial contribution. I mean use your eyes, do the no load guys eat at the soup kitchen? 
Are they “really” taking a “hit” for skipping the sales charge?</p>
<p>What they’ve done is got you to focus on one aspect of an investment, ignoring other things that aren’t so attractive. If you accept the fact that everybody gets paid in the business, then you have to figure out what’s reasonable? Should a fund that sits on it’s hands run the same expenses as a fund that is actively seeking new opportunities? </p>
<p>Everybody is an expert in investing, because simply no body talks about what they screwed up on. And everybody screws up here and there. </p>
<p>I do believe in these couple things from warren buffet. “invest in what you know”. If you don’t know enough “learn more”. </p>
<p>Use your head and your stomach in investing. Your stomach is the greatest indicator of your risk tolerance known. If something you’re comtemplating is making you uneasy, hold off. Always remember it is what works for you.</p>
<p>razorsharp,</p>
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</p>
<p>No, I didn’t. Of course people should read a variety of opinions and philosophies about investing. “Random Walk” was one of the books I read in my educational effort, and I have recommended it consistently when asked how one learns about investing.</p>
<p>newmassdad,</p>
<p>Every single one of the members of my former investment club who invests in individual stocks (not all of them do) beats the market. I’m not a financial genius. What screws a lot of people up is that they trade stocks; they don’t invest in companies. If someone has a disciplined approach to investing, does the homework/analysis, and learns from his/her mistakes, the chances are excellent that one can beat the market.</p>
<p>barneyfife,</p>
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<p>Oh, I’m perfectly willing to talk about my screwups! Go look at a one-year chart for BRKB; you’ll be able to figure out when I sold it, I’m sure! (I bought it in 1998, held it for nine years, and of course, the moment I sell it…!!!)</p>
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</p>
<p>[A</a> Random Walk Down Wall Street - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street]A”>A Random Walk Down Wall Street - Wikipedia)</p>
<p>If you believe Malkiel’s theory, you cannot also believe that:
Your statements are in direct conflict. You cannot both beat the market and not beat the market on a consistent basis.</p>
<p>razorsharp, it’s true that asset prices exhibit signs of random walk… over the short term.</p>
<p>And what statements of mine are in direct conflict? I haven’t said, at all, ever, that one cannot beat the market on a consistent basis. Indeed, over a long time frame, I think a value investor who does her homework and behaves in a way consistent with a good investing philosophy (investing in companies for their value, not trading stocks, buying consistently, reinvesting dividends, staying diversified, etc. and so on) is almost guaranteed to beat the market.</p>
<p>If I read the Communist Manifesto, it doesn’t mean I’m a communist, you know! :D</p>
<p>
Yes. I understand your point. My point is that if somone from another planet came to you and said “We are trying to set up a new political, can you make a recommendation?”, I hope would not recommend the Communist Manisfesto.</p>
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<p>I agree with most of your statement. But the randon walk theory says you cannot beat the market. Burton Malkiel would disagree with your above statement.</p>
<p>The danger of the Random Walk book is that it suggests investors are helpless and cannot control their financial futures. This is simply wrong. The Random Walk book is not for beginners.</p>
<p>only once huh? ;)</p>