I have a lot of to throw around but I don’t know any of it really works. I bought a book called ‘The Intelligent Investor’. What’s the best way to learn about this stuff? I have a good amount of to invest, but right now its all in 5 year fixed rate CD’s. Is this wise?

 

  • muncie birder 8:37 am on August 24, 2010

    "Intelligent Investors" is a must read for every investor. There is no trick to throwing money around, anyone can do that. But the real trick is to invest it with the probability of getting a decent return.

    What are your 5 year CDs paying you? 5%? Inflation is running at 6% to 8%. After taxes what are you getting? 3%?

    Another good book that is more basic than "Intelligent Investor" is "Investing for Dummies". Another that is a good book for you to consider is "All About Asset Allocation" Richard Ferri.

    At the moment equities are on sale–20% off. Sort of a summer clearance. If the Wall Street Department Store does not move out the on hand inventory they might have a further mark down later on, possibly another 10% to 20%. These mark downs are sort of an unknown quantity, but 20% is not bad. Some of the stock that has not moved is even marked down 50% off, especially financials.

  • lcpanther67 8:37 am on August 24, 2010

    you can do all the research you want but in the end you just need to go talk to a broker. he will help you the most.

  • Barney 8:37 am on August 24, 2010

    Here is some reading material that can get you started in the right direction, The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki

    Then try some of these
    What Works on Wall Street by James O’Shaunessey
    Beating the Street by Peter Lynch
    One Up on Wall Street by Peter Lynch
    The Warren Buffett Way by Robert Hagstrom
    How to Make Money in Stocks” and 24 Essential Lessons for Investment Success both by William O’Neil

    Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

    While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it.

    Other website that can provide instructions and help with procedures and terminology are
    Investopedia – http://www.investopedia.com/ Stock Charts – http://stockcharts.com/
    http://www.investorshub.com/ http://www.1source4stocks.com/

    Visit some of the more professional websites like Zacks – http://www.zacks.com/
    Smart Money – http://www.smartmoney.com/ Schaeffer’s – http://www.schaeffersresearch.com/
    Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

  • UppityWench 8:37 am on August 24, 2010

    Your choice of investment books is great. Other answerers gave you good ideas for websites … like Zacks.com.

    Try money-and-investing.com for general info for beginners to advanced. I suggest also that you narrow your field of vision a bit.

    Decide that you will learn all there is to know about investing in CDs and why you would do it. Ok, right now CDs are not a good choice, but one day they will be again. Now would also be a good time to learn a bit about annuities and why you should probably avoid them.

    Once you understand all that, move on to mutual funds. It is hard to beat the information on Morningstar.com for help with mutual funds. Get that information under your belt. For help check out Morningstar’s book collection … they have a workbook set that I’ve given as gifts to friends who claim to want to understand investing better.

    Move next to ETFs … again Morningstar.com is a good choice. Also a set of workbooks for ETFs. I know a very clever investor who sticks almost exclusively with ETF investments.

    Finally move to stocks, by checking out sectors and industries … don’t just jump right into individual stocks. The temptation to buy will pull you strongly … you’ll already have a great base of knowledge. But wait … watch and learn … and trade "on paper" for a few months. Then make some careful moves.

    I know all these sounds difficult and a bit tedious … it can be, but the time you spend now educating yourself will pay off. Trust me.

    I wish you luck!!
    Uppity Wench

  • Theodore B 8:37 am on August 24, 2010

    CD’s are not the wise way to invest. Yes, they have very low risk, but their return rates are so low that they only make up for inflation. So by the end of your 5 year investment period, you would probably end up with the same amount of money.

    The stock market is definitely a much better investment alternative. However, if you are looking for less risk, you could try mutual funds as well. You can learn more about stocks and mutual funds from books or websites. One of my favorite sites is Investopedia ( http://www.investopedia.com/ ). You should definitely check them out.

    Either way, you will need to open a brokerage account. There are two types though. You could open an account at either a full-service or discount broker. I prefer discount brokers because they are much cheaper and because I like to make my own decisions on trades.

    I currently use Firstrade ( http://www.firstrade.com ). They are an online discount broker. They are cheaper than the big name brokers such as Scottrade, Etrade, Ameritrade, and Schwab. I’ve used them for quite awhile now and have had no problems. I would definitely recommend you to take a look at them.

  • squadfix 8:37 am on August 24, 2010

    i learned by reading the wall street journal everyday. although i was also a finance major in college at the time, but before i pickd my major, i was readin teh WSJ and learning alot.

    there’s tons of info on there. google various issues for follow up info on what you read in the journal. that could literally keep you busy for the rest of your days.

    for example, the journal has an article about the options backdating scandal. you learn from readin the article. then, go to the net and learn the basics of options and other derivatives. then learn about option trading stragies etc etc.

    check out the great financial blogs out there like the accountingobserver…for the real meat and potatoes side of investing. lots of good stuff out there.

    Read Aswatch Damodoran…his books are easy to read…not too dry.