Your Questions About Investing For Dummies

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Paul asks…

What are some good books to read about the trading/investing?

I was thinking of starting off with two basic books “investing for Dummies” and “Stock Investing for Dummies“.

I was wondering what other books i should read after i read the two books above (if you even think the above books are good)?

Also, whats the difference between trading and investing?

Thanks!

financi4 answers:

Read “How to Make Money in Stocks” by William J O’Neil, but do not invest in this bear market. As O’Neil points out the market trend is the most important thing. Right now bear market funds and ETFs are the best performers.

If you take O’Neil’s Investors Business Daily, ignore the ratings he gives, since almost all stocks go down in a bear market, but when there is a bull market his recommendations can’t be beat.

Trading implies a lot of buying and selling. Investing implies that you buy and hold. An investment has been described as a trade that went down and you kept holding it hoping to break even.

Steven asks…

Which Book of investing would you recommend better: RICH DAD’S GUIDE TO INVESTING or INVESTING FOR DUMMIES?

financi4 answers:

Investing for dummies, it is more straight forward and easy to understand

Chris asks…

What are some great books on investing?

I am a beginner to investment and trade with a attitude for learning the most I can before making any decisions. I just finished my “Investing for Dummies” as well as “Trading for Dummies“. I have a basic concept of both investing and trading and want to go deeper. Any good suggestions on how to approach? Thank you in advance.

financi4 answers:

“Technical Analysis of the Financial Markets” for a general understanding of the basics of technical analysis.

“Elliott Wave Principle” gives an in depth understanding of how the markets work.

“The Delta Phenomenon” is for learning about the markets time cycles and when to buy or sell.

Reading to learn about it is important but the best way to learn though is to practice trading in a virtual account first to get hands on experience with zero risk.

Daniel asks…

Investing for dummies…help?

I need to start a portfolio but I have no clue where to begin. I’m afraid to talk to a consultant because of my investing ignorance. Please tell me the basics of investing starting with what a yield and return are.

financi4 answers:

Yield typically pertains to the percentage dividend that might be received for owning a stock.

Own shares of stock is actually owning a piece of a company.

Companies typically sell shares of stock to raise money.

So when you buy stock, you are buying a fractional ownership in that company.

At times the company will return some of its earnings back to shareholders in the form of dividends. The yield would be the amount of the dividend divided by the cost of the share. Much like the interest you receive on your savings account at the bank, the dividend yield represents your return on your investment.

Richard asks…

How to tell if a company is worth investing in…?

Currently reading ‘Stock Investing for Dummies‘, and a little confused on how to see how well a company is doing. It mentions so many different types of values, different ways of interpreting those values, and it’s all a little confusing.

How do you personally check to see how well a company is doing, and why?

financi4 answers:

It is profoundly difficult to tell what is the best stock to invest in. That is why most people should invest in no-load low expense mutual funds.

Michael asks…

Is investing for dummies by eric tyson worth even looking at?

I just picked up investing for dummies by eric Tyson, and the first thing I did was to see what it had to teach about options. I look at the table of contents, and see nothing about options, until I finally run into a little section that says STEER CLEAR OF OPTIONS AND FUTURES. then I proceed to read the section, which was about less than a page, and ALL it had to say was that don’t trade options because you can lose your premium and make nothing.

I recently graduated from college with a finance degree, I am a risk taker, I find myself much smarter than the average person/investor and this book tells me and everyone who thinks like me NOT to take risks. risks MUST be taken for great wealth to be acquired.

My question is, is this book meant to teach people some basic investing ideas for actual DUMMIES, so they don’t go waste their money, or would Warren Buffett say the same thing, steer clear of options? I basically have decided not to read any more of the book, and without knowing Eric Tyson, have lost all respect for the man. Please tell me what you think. I am a person who is trying to model my investing habits after the Trumps and the Buffetts of this world, SHOULD ANY ENTREPRENEUR BOTHER READING A BOOK THAT TELLS YOU NOT TO TAKE RISKS? is this book worth anything, or a waste of 500 pages?
thanks a lot everyone, i actually dont consider myself an expert, but I know that many many people never amass much in the stock market and business because they wont ever take risks. but you are all right, I will focus more on speculative books, and more advanced ones. I just started reading the old school book, “security analysis.” if anyone has read it let me know what they think, and I also would always love to hear more suggestions to expand my knowledge. Thanks

financi4 answers:

Investing for Dummies is for beginners. Options are not for beginners, that’s why they say to stay away. Since you think you are so smart, why would you need a book anyway?:

Ken asks…

Best book to read for online investing?

I’m about to check out a book from the library on how to make money off of Scottrade online investing. Any suggestions on the most beneficial book to get? Is Online Investing for Dummies any good? Thanks!

financi4 answers:

Here are some general book recommendations when it comes to the topic of investing:

Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns and Long Term Investment Strategies
by Jeremy J. Siegel
– This is a book that I recommend to all those who are just starting to learn a little bit more about the stock market and investing in general.

Investments, 10th Edition
by Charles P. Jones
– This is a book that I recommend to all those who already have a basic knowledge about stocks and investing and for those who wish to expand their knowledge.

Wealth Forever: The Analytics of Stock Markets
by Sarkis J. Khoury, Poorna Pal, Chunsheng Zhou, and John Karayan
– This is a book for people with an advanced knowledge of the stock market and investing. This book is recommended for all those who want to expand their knowledge on investing using mathematical principles and measures.

Derivatives Markets, Second Edition
by Robert L. McDonald
– This is a book that is for people extremely interested in derivatives and in the mathematical tools needed to comprehend derivatives.

Robert asks…

How can one start investing?

I’ve really been thinking about investing in stocks but the only thing is I don’t know where to start or what to invest in! is there like a “investing for Dummies“.

financi4 answers:

Congratulations on getting started. It’ll help you more than you know!

Your first dollars should be spent on getting educated on investing. You don’t have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it’ll help you! So let’s start there.

You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks!

How to invest depends on what you already know. We’ll assume that you’re beginning!

A good primer is How to Make Money in Stocks by William O’Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer’s books like Real Money (he’s got a few).

But books will only get you so far. At some point, you’ll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That’ll get you a pretty good primer so at least you’ll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don’t trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It’s a website that’ll help you understand options (what they do, how they work, etc). You don’t need to trade them, but the more you know, the more you’ll see how options can really be the safest way to invest (once you’re educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc). And yes, you can definitely deal easily online.

Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

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