Ask HN: How can I learn how to invest in the market? Hello, I'd like to learn how to invest in stocks, bonds, options, etc. However I find that there are no classes, and no realistic( please no make 100K in 5 days!!) books that would teach me what skills I need to learn. I'd just like to learn what to look for in market trends, how to accurately research stocks, and how to make money etc. I know some basic terminology and researching but I'd like to be better before investing any money. |
http://www.amazon.com/Four-Pillars-Investing-Building-Portfo...
The conclusion remains the same, however. Oh, how terribly dull it all is when compared to a nice game of craps.
>>give up, and invest in index funds. Alright, Any book recommendations for that?
At the same time, subscribe to some financial channels on YouTube (like Peter Schiff's for example) and watch them every day. Whenever you hear something you don't understand, read up on it. It'll take time but it will be worth it. (Just make sure you don't end up with all-bull or all-bear channels, like I said you want to keep your own emotional biases in check).
"Trading" is not the answer. "Investing" is. Read The Intelligent Investor and Security Analysis, both by Benjamin Graham; and F Wall Street by Joe Ponzio (His website fwallstreet.com also has a number of gems. Particularly, his post about how to value a business http://www.fwallstreet.com/article/26-calculating-the-value-...)
If you read those materials, you will learn how to invest. They will teach you how to value stocks and more importantly, teach you how to think about the markets - be emotionally detached.
The intelligent investor and securities analysis by Ben Graham are essentially reading albeit abit dry.
I'd also recommend (when looking at equities) that you do lots and lots and lots of research on individual stocks and really get to know them before you take the plunge and fully understand why you've decided to buy.
Also, have an entrance and exit point on all investments. Unless you're going for the 'value investing' strategy buying and holding forever.
Thanks for the entrance/exist point strategy. I am planning to invest for the short term so that should be useful
It also helps that his letters tend to be free of the BS that permeates some of the annual reports I've had to read through. When a business he owns isn't doing well, he admits to it without needing to couch behind platitudes.
You need to understand the psychology of markets, booms and busts and how the professionals fleece the wannabes. Understanding economics and reading Warren Buffet's remarks will lead you to invest in safe stocks, et al. That is not the way to getting rich anytime soon.
i highly recommend the origin of wealth -- an amazing book
mark douglas' books can be helpful,
how to make money in stocks by o'neil,
steenbarger's book
george soros' books
hank pruden's book
you want to learn what a trading plan is, and you want a trading plan that will work in irrational markets (since humans are not rational etc.), has some risk mgmtn (risk does not equal volatility), rules to buy and sell, etc.
hope this helps,
I want to invest short term(less than a year)
o'neil's book is very applied.
schwager's books are not all biographies, and include several very applied books. the market wizards series include significant amounts of practical advice on risk mgmt, exit strategies, trading plans, etc. -- from some of the best investors.
consider your level of commitment to trading. are you willing to dedicate 4 years of work to becoming a winning trader? are you willing to read 20 books about trading?
there is a zen aspect to learning about trading, which can help explain the value of biographies, when you think about it ;)
best wishes in your journey! ;)
There was a study I saw a decade ago about whether any funds produced better results than chance. Due to the difficulty of modeling the possibilities, only mutual funds were considered. So people like George Soros did not get counted. In the end 2 names had performed high enough that, with 95% confidence, their performance was not by chance. Their names were Peter Lynch and Warren Buffett. Peter Lynch retired before he got to the 99% confidence.
Interestingly both Peter Lynch and Warren Buffett recommend low cost index funds for average investors.