Not a dummy, but I feel like one when it comes to investing

May 19, 2010 9:17 AM

Looking for a good intro to investments book to get the basics.

Saw a couple of past threads, but none that I found really mentioned a how-to book.

Can anyone recommend a good book for learning the basics of investing? I already contribute to my 401k and Roth IRA but I want to better understand how to allocate my money.

We have an adviser at work but he couldn't really recommend any books. I have the list of funds available, etc. but I want to understand better what they mean: small cap, large cap, etc. I don't really have enough to invest to bother a financial advisor, but I want to be a more educated consumer.

I'm OK on the personal finance side in general, but investments to me is like ancient greek. I learn by reading, just would love some ideas on where to start. Books preferably as I'm not much of a blog reader, but if you know good ones, let me know.

If it matters, but I don't think it does for the purpose of intro books: 30, contributing to 401k with match and Roth IRA, although I don't max out either yet. Both are with Fidelity - moved my IRA from Citibank when I started contributing to 401K ~ 2 years ago.

posted by TravellingCari to Work & Money (11 answers total)

Best answer: This is the old-time standard for understanding the basic mechanics of how markets assign value to companies.
posted by H. Roark at 9:23 AM on May 19, 2010

Best answer: The Boggleheads' Guide to Investing sounds like it would be a good fit for you. It's definitely focused on the allocate wisely and keep costs down perspective, rather a trade and try to beat the market style (it actually devotes a whole chapter to argue against that). It introduces the various kinds of investments out there and has very basic but practical tips about how to use them properly in a long-term investment strategy.
posted by burnmp3s at 9:45 AM on May 19, 2010

Best answer: Seconding Bogleheads Guide. I have read it and keep a dog-eared copy in my apartment. They also have good online forums (bogleheads.org) which are often an interesting read, and a good place to go for advice (including their online wiki, which contains similar advice to the book).
posted by CharlieSue at 10:08 AM on May 19, 2010

Best answer: Graham and Dodd's Security Analysis is the classic text, but it may be more detail than you're looking for.

The Intelligent Investor is also good, but again is rather detailed and may not serve your interests.
posted by dfriedman at 10:17 AM on May 19, 2010

Best answer: My high-dollar portfolio manager uncle, in the business for decades in multiple capacities, has always recommended the same few books to me over the years. The one he always recommends I start with is Peter Lynch's One Up On Wall Street. It's a slim and uncomplicated thing. I swear I'm going to get around to finishing it one of these days. I'm really more of an old money kind of guy. Not that I have it, but that's the kind I want.
posted by Askr at 11:42 AM on May 19, 2010

Response by poster: Thanks all, added to my reading list. I'll give them all a shot - if I find one that doesn't work, it costs me nothing but time as they all seem to be available at the library or via inter library loan.
posted by TravellingCari at 11:56 AM on May 19, 2010

The books mentioned above are good investing books and I highly recommend reading them, however, they will not be of much help when it comes to investing in 401-K or Roth IRA type accounts because you can't invest in particular companies.
The smartest 401-K book you'll need sounds hokey but provides decent advice on how to manage a 401-K and know the constituents. It is a good enough introduction and you can stop there.
posted by Lucubrator at 12:17 PM on May 19, 2010

The books mentioned above are good investing books and I highly recommend reading them, however, they will not be of much help when it comes to investing in 401-K or Roth IRA type accounts because you can't invest in particular companies.

You can buy individual stocks in a Roth IRA. Your ability to do that in a 401(k) depends upon the particular plan for which you signed up.
posted by dfriedman at 12:29 PM on May 19, 2010

Response by poster: Thanks both - one more book on my reading list. I'm open to trying anything for this point because I can't imagine I won't learn something.

I don't believe I can buy stocks in my 401 (k), although there's plenty I don't know but the info is certainly good for my Roth IRA which is probably the worst off at the moment in terms of asset allocation.

Thanks again!
posted by TravellingCari at 3:20 PM on May 19, 2010

Best answer: A Random Walk Down Wallstreet
posted by a robot made out of meat at 4:57 PM on May 19, 2010

Best answer: Check out The Lazy Person's Guide to Investing (probably available at your library). Note: you DO NOT need to read the whole book. Just skim it, and in particular look at the various "lazy portfolios" they present. The takeaway: a handful of indexed mutual funds (they specify which ones) are your best best for whatever amount of money you want to invest in the stock market.
posted by kristi at 11:28 AM on May 22, 2010