Table of Contents
Introduction 11
Chapter 1 Are You Ready to Become an Investor? 13
Can You Afford to Invest? 14
Know Your Risk Profile 16
Setting Realistic Goals and Timetables 18
How Much Will You Need to Get Started? 20
Know Before You Invest 23
The Basics of Market Analysis 26
Evaluate and Adjust Your Approach 28
The "Ready to Invest" Test 29
Chapter 2 Steps to Grow Your Nest Egg 31
Give Your Finances a Physical 32
Artful Budgeting 35
Personal Finance Software and Apps 40
Develop a Progress Checklist 42
Chapter 3 A Quick and Dirty Overview of the Twenty-First-Century Economy and Investment Vehicles 45
How Economic Activity Affects Everything 46
Interest Rates Should Interest You 49
Important Numbers and Reports to Watch 53
Stocks, Bonds, and Mutual Funds 56
Fundamental and Technical Market Analysis 59
Technical Analysis 61
Chapter 4 A Close Look at Stocks 65
The Exchanges 66
Who Polices the Store? 67
What Stocks Really Are 68
Stock Indexes 68
Types of Stocks 70
Sizing Up Individual Stocks 72
Important Market Sectors 75
Penny Stocks 76
Chapter 5 Choosing Stocks to Buy 77
Five Points That Make a great company 78
Buy What You Know and Know What You Buy 82
Know Where You Are in the Market Cycle 87
Technical Analysis: The Art Of Reading Price Charts 90
Chapter 6 Buying Stocks and Monitoring Progress 91
Investment Clubs 92
Dividend Reinvestment Plans (Drips) 92
Who Will Do The Investing? 93
Your Buy List 95
Executing Stock Trades 98
Managing Your Money 100
The Buyer's Checklist 102
Chapter 7 Bonds: The Glue That Holds Financial Markets Together 103
What Is a Bond? 104
What Makes Bonds Risky? 106
Corporate Credit Check: Know the Bond Ratings 108
Prices and Yields 109
Buying and Selling Bonds 110
Chapter 8 Types of Bonds 111
Categories of Bonds 112
US Treasury Securities 112
Municipal Bonds 114
Corporate Bonds 116
Bond Calis 118
Zero-Coupon Bonds 118
High-Yield Bonds 119
Mortgage-Backed Securities 120
The Bond Investor Checklist 121
Chapter 9 The Mutual Funds The Beginner's Best Friend 123
What Is a Mutual Fund? 124
Why Mutual Fund Investing Is a Good Thing for Investors 125
Is It All about the Fund Manager? 126
Mutual Fund Families 128
Expenses, Loads, and Other Fees 130
Making Sense of Fund Reports 133
Different Approaches to Mutual Fund Investing 134
Dollar Cost Averaging: Buying During Good and Bad Times 135
Chapter 10 The Large Universe of Mutual Funds 137
Index Funds 138
Growth Funds versus Income Funds 138
Value Funds 140
Considering Sector Funds 141
Balanced Funds and Built-In Asset Allocation 142
International and Global Funds 143
Small-Cap, Mid-Cap, and Large-Cap Funds 144
Bond Funds 145
Mutual Fund Investing Checklist 147
Chapter 11 Combining Funds for Performance 149
Your Risk Tolerance 150
Diversification Is Your Friend 151
Considering Your Choices 153
Parsing Past Performance 156
Six Fund Investment Strategies 158
Tracking Your Funds' Performance 160
When To Sell 161
The Fund Monitoring Checklist 161
Chapter 12 Exchange-Traded Funds 163
What Are ETFs? 164
ETFs Versus Mutual Funds 165
What Kinds of Investments Can You Make Through ETFs? 167
Animal Crackers and Geometry: Spiders, Vipers, Diamonds, and Cubes 168
Choosing Wisely 169
Recognizing Special Situations 171
Buying and Selling ETFs 172
Tracking Your ETFs 175
Chapter 13 Investing with Your Conscience 177
What Are Socially Responsible Investments? 178
Socially Conscious Stocks 179
Green Bonds 180
Green and Socially Responsible Funds 181
Your Socially Responsible Portfolio 185
Chapter 14 Real Estate Investing: Getting Grounded and Rated 187
The Basics of the Real Estate Game 188
Using Leverage 188
Choosing the Most Profitable Real Estate 190
The Fix and Flip Business Model 191
Building Wealth Through Rental Properties 194
The Management Challenge 196
Real Estate Investment Trusts 198
Chapter 15 Taking More Risks 201
The Two Faces of Risk 202
Selling Short and Using Margin 202
Initial Public Offerings 204
Sector Investing 206
Commodities and Precious Metals 207
Trading Currencies 209
Derivatives and Options 212
Employee Stock Options 214
Trading Futures 215
The Strange World of Cryptocurrencies 215
Chapter 16 Working with a Financial Advisor 217
What Kind of Advice Do You Need? 218
What Can You Expect from a Financial Advisor? 219
Shopping for the Right Financial Advisor 221
How Much Will It Cost? 224
How to Find an Advisor 226
Chapter 17 Doing It Yourself 227
How Much Work Are You Willing to Do? 228
Online Investing 228
The Dangers of Online Investing 232
Investing with Apps 234
What to Look for in an Investment Website 236
Useful Investment Websites 238
Chapter 18 Investment Taxes 241
General Changes in the 2018 Tax Law 242
How Taxes Affect Your Portfolio 242
Types of Investment Taxes 243
Crafting Your Investment Tax Strategy 244
Methods for Reducing Your Tax Liability 247
Understanding Legal Tax Shelters 251
Chapter 19 Investing for Education 253
Start Planning for Tuition Now 254
Tax-Sheltered Education Savings Plans 254
The 529 Plans 255
Coverdell Education Savings Accounts 256
Prepaid Tuition Plans: Are They Worth It? 258
Education Bonds and CDs 259
Chapter 20 Retirement Planning 263
The Genius of Tax-Deferred Investing 264
It's Never Too Early to Start 265
The 401(k) Plan 266
Individual Retirement Accounts (IRAs) 269
Health Savings Accounts (HSAs) 272
Time and Focus Are Your Best Allies 273
Appendix A Online and Discount Brokers 275
Appendix B Investment Publications 277
Appendix C Glossary of Terms 281
Index 293
