How to learn more about investing.

February 1, 2008 8:45 AM

I'm saving about $2500 a month right now and am investing it. I really want to learn more about investing though, like immerse myself in it and maybe make it a profession.

I want to know everything about investing so I can be a smart investor and have a lot more certainty about what I'm doing with my money.

First is it possible for me to learn everything about investing with no formal schooling? Or do most investors go to school to study investing?

Second I'd appreciate links, book recommendations, podcasts, etc on the best way to learn about investing and a good way to immerse myself in it. Should I pay for a site like Morningstar to have access to better information?

Currently I'm using Morningstar's online classroom. I read business headlines and listen to Marketplace. But what else?

posted by bindasj to work & money (14 comments total)

start here, when you understand the concepts you will be on your way
posted by iamabot at 9:11 AM on February 1

Do you listen to Marketplace's weekend show, Marketplace Money? It's informative, lacks the hysteria of the CNBC crowd, and is available as a podcast. Highly recommended.
posted by Saucy Intruder at 9:13 AM on February 1

Read financial blogs like Get Rich Slowly. Find a good investment without too many income-leeching fees. Invest properly in your company's retirement plans.

Other than that, don't worry too much about it. You have a job, and while you want to save your money, you're not going to need to be a professional investor. It's like the difference between being a good driver who's smart about maintenance, and an actual mechanic. You want to take care of your money, but leave the heavy stuff to the professionals (once you've found the ones you trust and fit your needs well).
posted by explosion at 9:31 AM on February 1

Perhaps you could do an internship at a respected investment company, hedge fund or brokerage house. Also, UCLA Extension has several online courses concerning investing.
posted by conrad53 at 9:38 AM on February 1

Depends what you mean by "investor" and if you seriously want to pursue it as a profession. If you do want to do it as your job, and you want to be the kind of investor I respect, you need the fundamental knowledge found in the corporate finance books suggested in this AskMe question. And look into the CFA exam, as well.

I'd also add Ben Graham's Intelligent Investor to the books mentioned in that thread. The Intelligent Investor along with David Swensen's Unconventional Success would also be good to read if you just planned to invest your own assets.
posted by mullacc at 9:43 AM on February 1 [1 favorite]

Second "Intelligent Investor." A fave of Warren Buffet.
posted by ZenMasterThis at 9:45 AM on February 1

Read 'A Random Walk Down Wall St' first.
Don't watch too much CNBC.
Don't watch ANY Fox Business or whatever their new, terrible, CNBC-competitor is called.
posted by gomess at 10:01 AM on February 1

Play Wall Street Survivor.
posted by cda at 10:22 AM on February 1

First the "Intelligent Investor." I also really like You Can Be a Stock Market Genius, Joel Greenblatt + Warren Buffett's letter.

Perhaps A Random Walk Down Wall Street for an alterative view?
posted by laukf at 11:03 AM on February 1

mullacc, per usual, has the best answer in the thread.

Step 1 for a budding investor is to understand financial statements.
Step 2 is to understand the drivers of value.
(and if you write Damodaran a nice email, he'll clarify things he wrote in his book)
Step 3 varies depending on what kind of investor you want to be, I suppose.

Really, you can get all the building blocks you need from the CFA program, if you want a structured plan to develop the requisite bodies of knowledge.
posted by Kwantsar at 11:25 AM on February 1 [2 favorites]

I second the part about getting and keeping a good job. You could learn a lot about investing just through your 401K decisions and then take your 2500 and maybe start a Roth IRA linked to a mutual fund with half of it and maybe put the other half into an individual stock or mutual fund or moneymarket account. Don't try to become a daytrader with 2500!
posted by mattbucher at 11:32 AM on February 1

Should I pay for a site like Morningstar to have access to better information?

Currently I'm using Morningstar's online classroom. I read business headlines and listen to Marketplace.

I would suggest that you don't pay for education from entities who have a direct interest in the industry, whether they are brokers or ratings agencies or bourses. Their "education" is designed to encourage you to use their services and emphasises the upside. I also suggest that most commercial coverage of finance and business is braindead, superficial, and highly skewed towards favouring the outlook of advertisers. The only way you can tell the gold from the dross is to know your stuff first: so do your homework with books and annual reports etc and then, once you have a handle, THEN re-engage with the media. Critically and skeptically.

You could start with some very light reading in The Little Book That Beats The Market which is frothy but sound. I absolutely concur with the recommendation to read The Intelligent Investor.

(Naturally, you'll borrow these books for free from the public library rather than paying good money for them).

Now, I want to give a little lecture on investing.

Investing is when you engage in a venture where you are sure you will get your money back, plus some extra. Anything else is speculating.

A lot of what you hear described as "investments" and "investing" is in fact essentially gambling on asset prices. Only a very few people, whether through exceptional talent or exceptional luck, are consistently sucessful in the speculation and trading field. (See N Taleb Fooled by Randomness for some really good writing on that topic). It is best done with money that belongs to other people.

The first rule of investing is DON'T LOSE MONEY. The second rule is DON'T FORGET THE FIRST RULE.

Most of the material I have suggested you avoid is designed to arouse your greed and entice you into trading frequently, for the benefit of people who make their living from your trading activity. I believe you are better off reading through all the books you can find with "value investing" in their description.

If you read biographies of prominent figures in finance, a common pattern is that the famous traders wipe out sooner or later (Soros would be the only exception I can think of) and die poor or at least humbled. The slow patient accumulators... accumulate.
posted by i_am_joe's_spleen at 12:59 PM on February 1 [2 favorites]

Peter Lynch's Beating the Street is a fun book to read about the life and times of a very famous and successful investor.
posted by ikkyu2 at 5:20 PM on February 1

fool.com has some good articles. just dont pay for their newsletters, at least not right off the bat. read all their basic finance stuff first. and NEVER borrow money to invest. : )
posted by Penelope at 7:30 PM on March 28