Plan to invest in stocks/mutual funds in ~ 1 year. Suggestions of good books for starting out/research/study?

Question

I've read, reading or plan to read the following materials:

1. Investopedia.com material: a bit sparse, not too detailed and informative

2. Jim Cramer's Mad Money: Seems like he's a fad and investing style is more short-term (1-24 months) and not longterm.

3. Lynch's One up on Wall Street: haven't finished but seems pretty outdated. Gives a lot of examples which can lead to tedium.

4. Graham's Intelligent Investor: GAH! It's huge...haven't started

5. Stanley's The Millionaire Next Door: more of a self-help finance book but seemingly very good insight into self-made millionaires.

6. Stanley's The Millionaire Mind: more or less the same as above.

Answer 1

Well...you've listed several perfectly fine books...I always recommend the "Millionaire Next Door" to clients "starting out"...but, honestly...start out with a reputable advisor...and enjoy your retirement, etc. One of my clients used to own one of the Las Vegas Strip casinos...Wharton School grad etc...still has me manage his money because 1) I'm really good... 2) he wants to "have a life" ...versus sitting by the computer, reading books, articles, tracking news, earnings, etc etc...instead he's spending time with his wife, visiting the grandkids, etc.

However...to answer your question...I've compiled these two answers over the last two nights of "popping in" on here...and will save myself a lot fo time by "editing" some of this infor down for you (yes, this is the "condensed" version...of abreviated information)
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"Is there anywhere you would recommend to start learning about investing in the market?"
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**This will be a fairly extensive listing of where to go to learn about stocks, bonds, personal finance, economic issues(stock related), etc etc etc......only because you sound like you earnestly want to know.

For STOCK/Mutual Fund/Options/Finance-related information:

**www.kiplingers.com (more "personal finance" than stocks...but that's critical in life too...kiplinger newsletter and/or Kiplinger Personal Finance magazine!)
**www.fool.com (classes to sign up for, free, etc)
**www.seekingalpha.com (better for the "technical analysis" crowd)
**www.whispernumbers.com (professional and non-pro opinions...group think?...play it to your advantage?)
**www.yahoo.com (finance section...good site (that's free) for tracking (delayed) your stock portfolio)
**www.msnbc.com (current "in-the-news" stuff)
**www.morningstar.com (mostly for funds...stocks too)
**www.dismalscientist.com (more MACRO-economic...for those who want to know "why, how..." things happen)
**www.888options.com (Great Options site, free options DVD and classes!)
**www.optionsmonster.com (Options site)
**www.CBOE.com (THE Options exchange, "Learning Center"/"Options Institute"=free classes!)
**www.lightbulbpress.com (easy to understand, quick read, booklets etc.)
**www.street.com (Cramer's name to fame! "trader, not investor" related advice mostly!)
**www.horsesmouth.com (a stock/stock market barometer!)
**www.bankrate.com (good resource on rates, and much more!)

And...sooooo many more... I'll save "financial Calculator" websites (for everything you can imagine, and many that you can't) for another time!!! Oh, these are "off the top of my head".....there are many others that I've gone "blank" on...and may add later, after I check my work computer (since I've saved the shortcuts on several, I don't remember the actual addresses!...silly me!!!)

Study hard...don't lose your money "guessing"...study/read first...then take a "gamble?" (pun intended)...and/or find an above average/ethical professional to do the work for you.

***Oh, yeah....all of the above information should be FREE for all/overwhelming majority of the information...AND "Most traders/investors" don't know about them. Also, NEVER buy those newsletters, etc you'll get "pitched"...use these sites...and think for yourself...or hire a "personal" advisor who knows you and what your goals, needs, etc are.
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"Are there any ways to invest in The Market safely?"
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Okay... a "Master's Class" of investing "safely"...

There is a wide range of what people consider "safe" investing. Each individual's definition is typically based upon their dynamic of choice...be that...

1) time based "I might need this (or some of it) money in the next week/month/year/few years" etc.

2) the level of "fluctuation" that an individual is comfortable with, or NOT comfortable with ("I don't want to see ANY negative values EVER!", up to, "Hey, I know the market can bounce up and down +/- 10% or more in a short time...but I'm working with "extra money" and am in this to "hit it big" buying dips and taking the "big gamble" shots.")

3) Whatever your "personal" definition is...probably is somewhere in the middle.

Methods of investing with "some version" of safety.....

1) Guaranteed returns???!!!:
- FDIC guarantees...means CD's...one of the lowest interest rates around...and...being "fixed" into a "set rate" of return. It is also typically taxed at the same level as your "personal income tax rate"...a low return and high tax exposure...not one of my favorites...but it is "safe" if you're with a financially sound bank.
- Insurance products...guarantees with little or nearly no risk...this means an Annuity, fixed or adjustable. *Fixed means...about the same rates as a CD, a low rate, but with "tax-deferred growth" and the rate you receive is net of fees (not net of taxes, net of fees). *Adjustable annuities...there are many bad ones out there...that is why annuities have a bad name in some circles. Yet, like attorneys, there are good ones too! (I'm not an attorney). A highly rated insurance company with "principal guarantees" and without a "annuitization" requirement to get your money back after "X" period of time...and you can get the upside potential of the market (thru subaccount mutual funds of your chosing) and the guarantees/protections granted by the insurance company.

2) Non-guaranteed returns...require "strategies" to limit the risk associated with investing in the stock market.
- Dollar-cost-averaging...I has been said that Einstein once stated that "compound interest is the greatest invention in the world"....or something like that...or...he may have never said it...you know how people re-write history sometimes. Anyway...getting your money to make more money, compounding upon itself year after year...what a beautiful way to become wealthy! The "common man" way to do this is with regular payroll contributions into a retirement plan (i.e. 401k, but any IRA, annuity, regular brokerage account, etc can do). You limit your risk by buying small bits of a fund/stock regularly over time...acheiving a smaller/lower cost basis on your investment...and again...over time...grow that money into a "measureable amount". I do not have time here to go into ways to limit that risk as money becomes accumulated...that falls under "active management".

3) "Invest for the long term".....a commonly used phrase by people who don't really know what the "#?!@?" they are talking about...and allow themselves to "become slaves to the Almighty Index." Yes, over nearly any 10 year period an "investor" has made money on their money...but not everyone can, or wants to, wait out 10 YEARS to see if the odds play to their favor "this time". Hey, long term investing is good...but "riding the index" is for the less informed and "penny-wise pound-foolish" crowd.

4) Actively manage your money (or find an honest/ sincere/ knowlegeable professional to do it for you!).
There are many ways to "manage your risk"...here are just a few.....
- spread out your risk...buy funds/stocks in several sectors of the market. The Dow Jones...is ONLY 30 stocks...Nasdaq...about 100....that's 130 stocks out of 4,000+/- in the stock market. Typically, if you don't own the 30 largest industrialist companies in the market, or the 100 largest tech-oriented companies in the market...you have A LOT OF OTHER CHOICES to invest in. Plus...you won't care what the "dow and nasdaq did today" anymore. Some other "indexes" or "sectors" are: real estate (residential/ mortgage/ hospitals/ nursing homes/ industrial/ etc), natural resources (gold/ oil/ minerals/ copper/ uranium/ paper goods, etc etc), healthcare, small cap stocks, mid-size company stocks, international stocks (Emerging markets, Asia, Asia minus Japan, Europe, Latin America, etc etc), utilities, REITs (commercial and residential), etc etc etc. Then if one sector starts to drop...shift the emphasis to what is now growing faster...but NEVER too many eggs in any one or three baskets!
- Buying "protection"... another way to say... learn about "simple strategies" for options. You can use options to "protect/lock-in profits". If your investment gains 40% or more (% is your choice, I just picked this "low" one) and you don't want to see it "give it all back"...buy a "put" option...(simplest form)...before the next crucial event (earnings report, new product launch, buyout event, political election?, etc). See www.888options.com or the www.cboe.com for "free", really..."free" lessons, tutorials, etc...

5) Keep it all in balance..... mix it up...give yourself some "safety net" space. This is what I get paid to do for people in "active management stuff" that are "conservative"... put enough money into "fixed rates of return" to give your "market exposure" (stocks/funds) a "safety net." I.e. 2/3 of your money makes 6%, the other 1/3 has to lose 12% to give you a "breakeven" return...I know...simple brilliance...wish you'd thought of it...not hard.....have fun...but that only works with people who are happy with little/less return potential in both UP markets...returns are held back by the lower interest rates on 2/3 of your money...and not making as much as you could in interest if your "market money" is flat...it brings down your average "fixed rate" return. Ideally, the interest rates are "decent" and your funds/stocks do great...and you are too greedy, after saying you're "conservative".

Well, enough...or too much for tonight...time to go to bed. I've rambled off enough stuff from "off the top of my head" or as they say..."in a stream of consciousness" writing session.

Best of luck.

**if you'd like to learn more...see my other posts...I don't ever post "trivial stuff"...not that I can ever recall. You will find a TON of links to learning sites from them.

**Oh, and forgive my occasional rants...like this one... Ignore the intellectually challenged and the "a little information is a dangerous thing" crowd.
Professionals "as a whole" don't beat the average...uh, that's what makes it into an average!!! In every "average" class there are those who "mess up" the curve for everyone else...that's who you hire to "manage your money"...be smart enough to hire the "A/B students" that regularly/always beat the average...not the brain dead "goofs" who repeat other people's "wise sayings" in an effort to make themselves seem smarter than they are. Okay, sorry, tired.....have fun, God bless us all!!!

Answer 2

Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
by John C. Bogle . . Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies )
by Jeremy J. Siegel These books are on sale for August 28th, They are new editions of the authors' previous Very good books These two books will give you a history of the stock market and successfull strategies for investors. Jim Cramer"s book is for very experienced investors. the books you have on your list are good the two
I mention are for beginners and give you very thorough course in investing. I read the original books in the 90's and they were what I reread when I needed to refresh my investment knowledge. Remember what you said "Long Term Investing " Good luck

Answer 3

Here is one thing to keep in mind about the Roth IRA account. There is never any tax on it where as there is on your 401k. This becomes important when considering your asset mix. Income producing investments are taxed at the full tax rate as will be your 401k. Hence it makes sense to invest at least some of your 401k in income producing assets--bonds, LPs, REITs. The income from each of those is taxed at the full tax rate anyway. Now since the Roth IRA is never taxed, it also makes sense to put those types of assets into the Roth IRA also. And also equity investments. What you neglected to mention are investments outside of these two vehicles. If you have some, they should be investments that would be taxed at the capital gains rate--equity investments. Actually, unless you are in the highest tax bracket it makes sense to have a portion of your equity investments outside of a 401k. By doing so your total tax bill will be decreased, especially if you are a long term investor. If you have the least hankering to invest some of your money in gold and silver those absolutely should be within a Roth IRA. Both are taxed as collectibles otherwise. Another thing to consider in regard to the 401k is that in future years the tax rate might actually be higher, perhaps much higher, than it currently is. Since you really have no choice of placing non-mutual fund investments within a 401k except for perhaps company stock, it certainly does make sense to invest Roth IRA money in company stocks rather than mutual funds. But be careful. It is very tempting for many to speculate with their Roth IRA account especially short term trading which otherwise would be taxed at the full tax rate. That would be a good way to reduce that value of the Roth account. Be just a little cautious. Invest in the likes of MCD, WMT, JNJ, BDX, KO, etc. Or maybe ETP with its 8% dividend or PAA with its 7.5% dividend. And do not invest it in fewer than 5 different companies.

Answer 4

Define your investment philosophy first. Read about the different appraoches and then decide which one works for you. I think peter lynch's book is a really good book to start with. Try buying the intelligent investor with chapter commentaries, it makes it easier to understand. Also try the essays of warren buffett;they're indexed on berkshire hathaway.com. Try buffett's autobiography as well; buffett the making of an american capitalist. it's an interesting read and a huge motivator. Yiou can also try common stocks uncommon profits by philip a. fisher . it's a little dated but fisher's qualitative appraoch provides an interesting alternative to graham's quantitative one.

Answer 5

If you are planning on long term investing with little change in your portfolio, you need to get into the top 10 dow jones dividend paying stocks.
These shold include XOM xexon oil MO, phillip morris CVS (chevron) JnJ, johnson and johnson
Amzn Amazon
best exchange traded fund fxi ewz slx dnh dnd gxc mxe pkx eww cpla
timber trusts long term pcl plumcreek
sbj san juan royalty trusts
These are top stocks and etf's Good luck
and you are right about those hype the stock guys. they get paid well to make stinkers look good.

Answer 6

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Answer 7

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Answer 8

An easy, risk-free, way to start learning about the market, is to create a "practice" portfolio at http://www.top10traders.com - it's free - each month the site ranks the best performing investors.

Answer 9

Understanding Wall Street by jeffrey B.Little, is very illustrative and easy going.

Answer 10

you forgot graham's security analysis a must read for investors

Answer 11

check this link its good


http://buyingandsellingshares.blogspot.com/

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