Investing

[mosdef]

What sites or books can I check out that would start me up into the world of investing? I don't know which angle I want to take, and I only know so much about investing. I would like to get into stocks mainly. Thanks!

-mosdef

 

[Double Trouble]

The motley fool site has a pretty comprehensive introduction to investing that does a decent job at explaining some of the things ya need to know. Here's "tagej's cardingal rule of investing" (for free too!), NEVER ever ever invest anything more than you can afford to lose in stocks. If you have funds you can't possibly afford to lose, put them in a relatively risk free investment vehicle like government bonds.

 

[mosdef]

I have a pretty nice amount of funds after working this summer. I have no obligations right now so that's why I'm interested.

-mosdef

 

[Double Trouble]

I presume then that you want to invest one portion of your $$ for the long haul, while using the other portion to try and go after some more aggessive growth potential.

If you have the time and resources to really do your homework on companies (not just "my buddy told me they're really good&quot, you could research some solid companies and buy into them. Take the rest of your money and put it in some mutual funds. There's a wide variety of mutual funds to choose from, each with it's own investment objectives, so you can choose the one that best fits your goals.

Don't invest in any mutual fund that has "loads" (meaning a fee to get in or out of the fund). Empirical evidence has shown them not to outperform the rest of the mutual funds, but they still eat up some of your funds with the loads. Get into a no-load fund. I like the Janus family of funds, or Fidelity funds.

 

[denali]

take a look at Superstar Investor it's the Yahoo! of investing. Some guy has spent the last 2 years spending like 16 hours a day 7 days a week cataloging all the investment sites on the WWW. He also does reviews of them.

 

[kranky]

There were a few threads a while back which might help (search off-topic for "investing 101&quot.

You are smart to try to learn before jumping in. I think right there you are going to greatly increase your chance of success. There's an old saying "Before you invest, investigate".

Don't be discouraged when you find that, like everything else, there's always more to learn. tagej is right when he says don't jump into something because your buddy said it was a sure thing. I well recall a member here saying a few months ago that JDS Uniphase was a sure thing. Could only go up, leader of its industry, etc. Well, anyone who bought that stock in July at 140 could sell it today for a 50% loss. Recognize the difference between investing and gambling. A lot of people call themselves investors when they are really gamblers.

As you read, you'll find that many well-respected people disagree on major points. Realize that if there was a sure-fire way to get rich, everyone would know it.

It's impossible to pick winners every time. But the difference between coming out ahead and losing is how you handle it. A lot of people hold on to the losers because they are sure it will come back. Then they sell the winners to "lock in" profits. That's the exact opposite of what you should do - sell the losers and keep the winners! But there is so much psychology involved people get their judgment clouded.

To get started, I'll recommend "How to Make Money in Stocks" (revised in 1994) by William J. O'Neil, and "How to Buy Stocks" (revised in 1994) by Louis Engel. O'Neil's book uses some confusing terminology that he has developed himself (I'm well-versed in investing, and I was having trouble!) but you should be able to follow his basic premise. Engel's book is good for learning a lot of the everyday terminology and theories of the market.

Note that both books focus on individual stocks, but for a new investor a mutual fund is probably a better choice and much less risky. Check the morningstar.com site for a lot of information on mutual funds.

Best of luck to you with your investments.